24th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
Assent to the following bills reported: -
Tariff Board Bill 1962. Customs Tariff Bill 1962.
Customs Tariff (New Zealand Preference) Bill 1962.
– I ask the Leader of the Government in the Senate whether the Prime Minister knows that in the light of the serious charges made against the United States by the Minister for Trade, according to reports in the press a number of parliamentarians had decided, as an expression of disapproval, to boycott the dinner to the Honorable Dean Rusk but when they found that the dinner was in honour also of the Right Honorable K. Holyoake, they resolved, out of respect for the Prime Minister of New Zealand, to attend the dinner.
– I had not heard of it. I am surprised to learn of it. I compliment on their good sense those who decided to attend the dinner. I condemn those, who must have been very few in number, who thought of boycotting the dinner.
– I preface a question, which I direct to the Minister representing the Minister for Territories, by saying that recently newspapers reported that a company has been formed in the Northern Territory to take over the Humpty Doo rice-growing settlement from the original company. I ask the Minister whether the four share-farmers who have been carrying on there since the original company ceased operations are members of the new company.
– In 1961 a company named Adelaide River Limited was formed to take over the assets and liabilities of Territory Rice Limited. Its main shareholders included the major creditors of Territory Rice Limited. A separate arrangement had been made in 1960 under which four farmers continued to grow rice, as tenants of Territory Rice Limited, and that arrangement has continued under Adelaide River Limited. More recently, it was reported in the press that the Rio Tinto organization had purchased the shares of Territory Rice Limited. The Government has no first-hand knowledge of this transaction, but it is assumed that the sale of these shares does not affect the position of Adelaide River Limited as the principal shareholder in the continued farming activities at Humpty Doo and that the position of the four tenants has not been affected.
– I preface a question, which I direct to the Minister representing the Postmaster-General, by pointing out that on 1st March I asked a question relative to the Australian Broadcasting Commission’s being permitted to continue to be a member of Intertel. Did the Minister read in the Melbourne “Age” of 13th April that the Government was reported to have said that the A.B.C. could not join the television film group? The article also stated that further representations had been made and that the Government had again decided not to permit the A.B.C. to join Intertel. Has the Government changed its mind in this matter, and may the A.B.C. now join this organization?
– With great respect to the author of the newspaper article to which the honorable senator has referred, I suggest that it may have been somewhat premature. I understand that the Government has made up its mind on this matter. I hope to have this week from the PostmasterGeneral an answer to the question that the honorable senator has asked.
– Has the Minister for Civil Aviation noted the comments of the Director-General of Civil Aviation regarding the wearing of the runways where Viscount aircraft land at both Devonport and Wynyard aerodromes? Is it proposed to strengthen the runways to permit Viscount aircraft to continue to serve the north-west coast of Tasmania?
– Yes, I am aware of the comments made by the DirectorGeneral, subsequent to an inspection recently made by him. The deterioration which is occurring at the airports mentioned by the honorable senator is causing considerable worry to departmental officers, and the matter is under consideration at the moment.
– My question is addressed to the Minister representing the Minister for Social Services, ls it a fact that, under the amended social services legislation effective from March of this year, which increased payments for dependent children of recipients of unemployment and sickness benefits without making a corresponding increase in the allowance for dependent children of invalid pensioners, a grave anomaly may arise where recipients of unemployment or sickness benefit are transferred, on the advice of a Commonwealth medical referee, to the invalid pension? Will this not involve a reduction of the payments received for dependent children under the new invalid status of the parent? If that is so, will the Government take the earliest possible action to rectify the anomaly?
– I can only say that I shall ask my colleague, the Minister for Social Services, to have a look at the honorable senator’s question and inquire into the position.
– I direct a question to the Minister representing the Attorney-General. Is it a fact that a bill providing for a jury ordinance for the Northern Territory has been prepared by the Attorney-General’s Department and that it includes provision for all citizens of the Territory, whether white or coloured, to sit on juries, but excludes women? If this is a fact, will the Attorney-General revise the legislation and in accordance with the commonly held belief that women should have equal opportunity for service in the Commonwealth - a belief that is expressed in Government policy - accord to the women of the Northern Territory citizenship rights equal to those enjoyed by women in other States of the Commonwealth?
– i am not aware whether the Attorney-General has prepared legislation along the lines mentioned by the honorable senator. However, I shall find out from him, for the benefit of the honorable senator, what the position is. It may well be, if there is such a bill in contemplation, that there is in the mind of the Attorney-General the application of some of the provisions which, I understand, apply in the Australian Capital Territory. Those provisions are, I think, to the effect that women are not compelled to serve on juries but are not excluded from serving if they wish to do so. I understand that those provisions were made for the benefit of women who might find it difficult to get away from their families. The provisions do not deprive women of any rights which they might have, but they prevent women from being compelled to serve on juries. However, I shall try to find out what the Attorney-General intends, and I shall let the honorable senator know.
– I ask the Minister for Civil Aviation whether it is a fact, as reported in to-day’s press, that air lines operating across the Pacific will be forced to ground their aircraft during the proposed high altitude H-bomb blast over Johnston Island. Has the Government made any protest against this most dangerous proposal to explode an H-bomb in the Pacific?
– At a later hour I propose to seek leave of the Senate to make a statement about trans-Pacific air services. I can tell the honorable senator that the Government has not entered any protest about the conduct of the nuclear tests referred to. The Government believes such tests to be necessary for the maintenance of proper defence in Western countries.
– Will the Minister representing the Minister for Trade say whether it is a fact that Austria has recently announced her intention not to apply for admission into the Common Market? Have any other European countries made similar announcements? Will the Minister- consider establishing a trade commissioner service in countries such as Austria so that every effort may be made to win trade with those countries and thus counter the effects of England’s entry into the Common Market and the loss of Commonwealth preferences?
– My recollection is that Austria does not contemplate joining the Common Market. 1 think three other European countries have made similar decisions, but I hesitate to name the countries concerned lest I be wrong. I shall bring to the notice of Mr. McEwen the suggestion relating to the trade commissioner service.
– Will the Minister representing the Treasurer say what effect, if any, the decision to alter the size of certain of our coins will have on the Perth Mint? If the decision will affect the operations of the Perth Mint, will the Minister give an assurance that the rights and interests of employees of the Perth Mint will be adequately safeguarded? Will he say whether any change is to be made in the methods of treating gold now employed at the Perth Mint? In future, before information about currency changes is given to the press, will the Parliament be afforded the privilege of debating the matter? Will the Minister give further consideration to a promise that he made in the Senate that before decimal currency is introduced into this country the public will be properly informed on the matter and the subject will be debated in the Parliament in the way that important subjects are debated in the world’s other democracies?
– The Perth Mint has hitherto been engaged in the minting of copper coins.
– The new coins will be made of copper, according to press reports.
– The proposal to mint new coins requires new types of machinery. This machinery will be installed in the new mint to be built in Canberra. As a result, no more copper coins will be minted in Perth. However, I am pleased to tell the honorable senator that the Perth mint will be retained as a gold-refining mint. I have had a number of discussions with the men’s committee at that mint, and by statement and correspondence the Treasurer has made it quite clear to the Perth employees that at the time of the change-over to the Canberra mint arrangement will be made, as far as is possible, for them either to be retained on the Perth staff in connexion with the refining of gold or, if they so desire, to be transferred for employment in the new mint at Canberra.
The honorable senator asked whether a full report will be made. I believe it is fair to say, in regard to the progress to date on the introduction of decimal currency in this country, that members of the Parliament and, indeed, the Australian people have had a first-class opportunity to study what I regard, and what is generally regarded, as a first-class report - that issued by the decimal currency committee set up by the Government.
– But the Government has not committed itself to the Parliament yet. Your answer to my question-
– If you will possess yourself in patience, I will endeavour to answer your question. There are about twenty sub-sections in it and I am doing my best to answer it. I am now dealing with about the nineteenth sub-section. The honorable senator asked whether the Parliament will have an opportunity to debate this question of decimal currency. As the Treasurer has indicated, it will be some time before the Government makes a decision on when decimal currency might be introduced in Australia. I have no doubt that, prior to its introduction, the Parliament will have every opportunity to discuss this most important matter.
– My question, which is addressed to the Minister for National Development, relates to the Chowilla dam project in South Australia. Can the Minister let the Senate know the outcome of the meeting held on 16th April last between the Prime Minister, the Treasurer, the Premiers of Victoria and South Australia, the Deputy Premier of New South Wales and himself? Will he say what progress was made, what further investigation of the Chowilla dam project is contemplated and when a further meeting of State Premiers and the Prime Minister is expected to be held?
– In my opinion, very good progress was made at the meeting. There was a general acceptance by all three States and the Commonwealth of the need to go ahead with the Chowilla dam proposal, and there was agreement between the States on the manner in which the water is to be shared. That is always a very difficult matter on which to reach agreement in water conservation schemes. Agreement has yet to be reached on the method by which the scheme is to be financed. Then, of course, a great deal of work will have to be done on the amendments that will be needed to the River Murray Waters Act. No date has been fixed for the next meeting. Some conversations and discussions are to be held. When the picture is clear as a result of those further discussions, another meeting will be held.
– My question to the Minister representing the Minister for Immigration relates to the three Portuguese sailors who are under a deportation order. Is it not the belief of the Australian people that the Government’s policy is to assist people, whoever they are, to lift the yoke of tyranny? Despite the legal situation, is there not some humanitarian discretion left in the Minister for Immigration - and failing him, in the Cabinet - to help the three Portuguese sailors in their desire - I may say their desperation - to get away from the tyranny in their own country? Will the Government urgently consider allowing these men to remain here or make representations to an international shipping line to give them employment, instead of deporting them to Portugal against their will?
– I am happy to tell the honorable senator that the Minister for External Affairs and the Minister for Immigration have decided that as the Portuguese Government is not pressing for the return of these three ex-naval ratings they will be allowed to remain in Australia.
– Did the Minister for Civil Aviation recently inspect the Hobart and Launceston airport terminals and state that his department envisaged the expenditure of over £2,000.000 at Launceston airport to provide suitable passenger and cargo facilities as well as adequate taxiways and other engineering projects? Is he now able to give more detailed information as to when the work will be commenced and completed? Will the proposed work provide Launceston with the facilities which are warranted by the passenger and cargo business now offering, and will they be able to cope with the expansion that is likely during the next twenty years?
– Recently I had! an opportunity to visit both Launceston and Hobart airports. The proposed expenditure on the developmental aspect at Launceston will be just over £1,000,000, not £2,000,000 as mentioned by the honorable senator. Perhaps he has become confused in respect of the proposed total expenditure which involves some hundreds of thousands of pounds on technical equipment over and above the expenditure on the development of the airport as such. The first stage of the development of the taxi-way is now in progress, the contract having been let late last month. It is believed that this first stage of the work, which is necessary before other aspects of the work can proceed, will be completed about January next year. Meanwhile the department hopes to advance the project to what we call design list C. If that is done, the proposal will go first to the Department of Works to complete its part of the planning and then to the State Department of Public Works. In this way we hope that the work will commence during the latter half of 1963.
– I preface my question to the Leader of the Government by stating that last month Senator Wright indulged in an academic exercise regarding the European Common Market, and the Leader of the Government expressed his deep sense of appreciation of the profound research work which the honorable senator had done. He also expressed his great sadness that this matter had not been debated in the Senate. I now ask the Leader of the Government: Did he forget that the Prime Minister submitted to the Parliament last August a paper on the subject? Did he recall that my distinguished leader, Senator McKenna, in a smashing attack on the Government, set out in considerable detail extracts from Speeches of Governors-General over a number of years and that all Senator Wright did was to copy these extracts? However, Senator Wright forgot to say that they showed a complete lack of urgency in the Government’s mind. The Government is waking up only now that Mr. McEwen has returned empty-handed to tell us that the critical stage has been reached. Honorable senators opposite are laughing, but this is no laughing matter. It is a very serious matter in the country districts that I have visited during the last week. Even at this late hour, can the Leader of the Government tell the perturbed Australian rural population what solution the Government has to offer if the United Kingdom enters the Common Market?
– I hope on Thursday night to read in the Senate a comprehensive statement on the European Common Market in the same form as the statement to be delivered by my colleague, the Minister for Trade, in another place. After the reading of that statement some one will move that the paper be printed, and the matter will be then a subject for debate in the Senate. I am certain that all honorable senators on both sides of the chamber will look forward with keen anticipation to Senator Hendrickson’s contribution to that debate.
– It is quite correct, as announced by the Treasurer-
– Do not tell the Parliament, tell the press.
– The honorable senator is rather facetious to-day. It is correct, as the Treasurer indicated in a statement issued a few days ago, that new coins will be minted and that those new coins will replace the existing penny and threepence. They will be round bronze coins. I am a little perplexed by the honorable senator’s suggestion that they will not be easily distinguishable one from the other. I did not see the press illustration of the coins, but I am assured - the honorable senator will be pleased to know this - that the coins will be easily distinguishable both by size and weight. They will be distinguishable by sight, and, what is more important to a man, they will be distinguishable by touch as he puts his hand in his pocket. I do not expect that there will be any difficulty in distinguishing one coin from the other.
– I preface a question to the Minister representing the PostmasterGeneral by saying that on 11th April the Minister replied to a question I asked about the issue of further commercial television licences in some capital cities. In his reply he stated that the Australian Broadcasting Control Board had been consulted before the Government made its decision to issue these licences. I now ask the Minister: What was the nature of those consultations? When and with whom did they take place? Did the Australian Broadcasting Control Board express any opinion as to the desirability of issuing these licences? If so, what was the board’s opinion? I ask that a reply be given to my question before the adjournment of the Senate for the winter recess.
– Senator Kennelly obviously assumes that I am not in a position to supply the detailed information that he requires. That is quite true; I am not in a position to do so, but I shall seek the information from the Postmaster-General and shall endeavour to have a reply for the honorable senator before the Senate adjourns for the recess.
– Shall I put the question on the notice-paper?
– Thank you, if you will.
– I direct a question to the Minister for National Development. Is it a fact that a third flow of oil has been found by Australian Oil and Gas Limited in Queensland? Do these discoveries constitute an oil-field of sufficient extent to warrant construction of a pipeline from the site to the nearest port for refining purposes?
– As Senator Scott says, a third hole drilled on the SuratMoonie structure was successful. There are now three oil-bearing holes situated in a line just over 2 miles in length. The company proposes to drill a couple more holes before finally reaching a decision as to the method of developing the oil-field.
– I ask the Minister for the Navy: Is it a fact that in connexion with the ceremonies commemorating the battle of the Coral Sea, United States warships are visiting Tasmania and all mainland States with the sole exception of Western Australia? In view of the importance of Western Australia as a United States base during the Second World War, and the ties of friendship and gratitude then formed, will the Minister endeavour to have at least one United States warship visit Western Australia during the current celebrations? If this is not possible, will he try to ensure that in future Western Australia shall not be omitted from the itineraries of such visiting ships?
– The American naval ships which usually come out to Australia at the time when the battle of the Coral Sea is commemorated are operational ships taken from the United States fleet. They are not in any sense under any direction from the Australian Government. Indeed it is difficult, I should think, for them to be far from their operational duties for long. I shall bring the question to the notice of the authorities. We may be pleased that Australia is able, year by year, to see the newest types of ships from the United States. I should hope that occasionally it would be possible for them to extend their visits, in which case, 1 am sure, they would visit Fremantle.
– I ask the Leader of the Government a question in relation to a matter about which I have been, as yet, extraordinarily patient. Some time ago, by way of a question, I raised with the Minister a matter which led to some measure of contention. He, with his usual courtesy, promised some months ago to contact the Prime Minister with a view to having stopped the pernicious practice of some Ministers of divulging to members of the House of Representatives the contents of senators’ correspondence. Has the Minister received a reply to his representations to the Prime Minister? If so, what was the result?
– I am sorry to say that I have not a reply.
– Is it because of the usual dilatory approach, not by you, but by the Prime Minister?
– No. I thought I would have had it to-day. I shall seek it now from day to day.
– I ask the Minister representing the Minister for Shipping and Transport whether it is a fact that everincreasing numbers of people are travelling on the trans-continental railway between the eastern and western coasts of Australia. Is it a fact that on the train, although fairly good types of wine are stocked, the best wines produced in Australia, which come from Western Australia, are not stocked? If this is a fact, will the Minister ensure that in future Western Australian wines are available to these travellers?
– One could buy himself into a nice fight if he wanted to assert in this mixed company that the wine produced in any one State was better than the wine produced in any other State, although if I were to express a personal preference, I would say that Western Australian wine is of first quality. If it is a fact that it is not included in the cellars - if that is the appropriate word - of the Trans-Australian Railway, I shall see! whether I can induce my colleague to include it.
– Has the Leader of the Government given consideration to the very radical change made by the United Kingdom Immigration Act of 1962 in relation to citizens of the Commonwealth of Nations travelling to the United Kingdom? Is he aware that Australian citizens who propose to travel to the United Kingdom are embarrassed by the fact that their submissions in relation to passports and rights of travel under the various categories hgv: to be made to the United Kingdom representative in Canberra? Will the Minister inform the Senate of the arrangements that the Government has made to obviate this cause of embarrassment and delay to the very many Australians desiring to travel to the United Kingdom? Will he seek from the United Kingdom representative in Canberra an assurance that arrangements will be made, under delegated authority or by some other means, whereby Australian citizens may apply in their own States and obtain vises and approval to travel - or notification of refusal of approval - without having to incur the trouble, expense and delay involved in sending their applications to Canberra? Does the Minister agree that this very radical alteration in the procedure for travel between Commonwealth countries demands action by the Government to preserve the method, whereby citizens might travel, as far as possible, freely within the Commonwealth of Nations and particularly to the United Kingdom? Specifically, I ask whether facilities can be provided, by the United Kingdom in each State, by arrangement with this Government, whereby the administrative machinery will not be concentrated in Canberra?
– Senator Cooke would be the first to admit that only the United Kingdom Government can make decisions about the terms of entry of visitors to the United Kingdom. The new procedure means a big change in travel arrangements for people wishing to travel between Australia and the United Kingdom. When we were informed of the proposed change a good number of representations were made to the United Kingdom authorities in Australia and overseas, and the arrangements that have been finally evolved have had regard to the representations which the Australian Government has made. I shall arrange for the relevant Minister to inquire into the further points raised by Senator Cooke, such as decentralization of authority, with a view to seeing whether his suggestions can be accepted.
– Can the Minister for National Development say whether it is a fact that a new tinplate industry has been established at Port Kembla, in New South Wales? If such an industry has been established, is it expected that a reduction in the cost of tinplate will result and that Australian manufacturers of foodstuffs who use tinplate will be able to reduce their costs, thereby enabling them to compete more favorably on overseas markets?
– Yes, the Broken Hill Proprietary Company Limited has completed its tinplate mill at Port Kembla and the mill is now in production. I think every one will agree that this is an extraordinarily valuable addition to Australian manufacturing potential. I do not pretend to know the actual cost figures, but I do know that the result will be that tinplate can be produced for appreciably less than the cost, to this stage, of imported tinplate. Because of the large volume of exports of tinned goods, there is little doubt that this new manufacturing industry will help materially in our drive to increase exports.
– I address a question to the Minister representing the Minister for Shipping and Transport. Some time ago I asked a question regarding the inauguration of the standard-gauge passenger service between Melbourne and Sydney. I wanted to know whether a passenger car or cars, similar to those used on the new service, could be made available for the service between Goulburn and Canberra, and the Minister promised at the time to have a word with the Minister for Shipping and Transport with a view to seeing whether that could be done. I now ask whether he has received a reply to his inquiries.
– I well remember the question being asked by the honorable senator. I am trusting to my memory, but I am almost sure that some time after the question was asked, the Minister for Shipping and Transport stated that a passenger coach of a much improved type, if not of a type similar to those on the MelbourneSydney service, would be placed on the Goulburn-Canberra service. If I am mistaken in that impression, I shall take an early opportunity to discuss the matter again with my colleague.
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has supplied the following answer: - 1-4. I do not propose to depart from the practice of the Parliament by giving, in answer to a question, an opinion . on points either of constitutional or of statutory interpretation. So far as Commonwealth elections are concerned, the effect of the Constitution and the Electoral Act has always been to require a Commonwealth public servant to resign before he is nominated. The position under State law is not uniform, but the Public Service Board took the view, in the Government’s opinion rightly, that there were good reasons why a Commonwealth public servant should accept similar obligations in regard to a State election as the law requires him in the case of a Commonwealth election. The board, in its circular 1961/14, accordingly announced for the guidance of officers that leave would not be granted to enable an officer to contest either a Commonwealth or a State election. The honorable senator is no doubt aware of the provisions in the Public Service Act which provide that persons who, having resigned their positions as officers or employees in order to contest either a Commonwealth or a State election, have failed to be elected may be re-appointed at the same salary, and that when re-appointed, they shall be deemed to have continued in the Commonwealth service as if they had not retired.
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has furnished the following answers: -
asked the Minister representing the Minister for Labour and National Service, upon notice -
– The Minister for Labour and National Service has supplied the following information: -
asked the Minister representing the Minister for Labour and National Service, upon notice -
– The Minister for Labour and National Service has supplied the following answers: -
asked the Minister representing the Minister for Shipping and Transport, upon notice -
– The Minister for Shipping and Transport has provided the following answers: -
asked the Minister representing the Minister for the Interior, upon notice -
– The Minister for the Interior has furnished the following replies: -
asked the Minister representing the Minister for Labour and National Service, upon notice -
– The Minister for Labour and National Service has supplied the following information: -
asked the Minister for Civil Aviation, upon notice -
– -I now provide the following answers: -
asked the Minister for Civil Aviation, upon notice -
– The answers to the honorable senator’s questions are as follows: -
asked the Minister for Civil Aviation, upon notice -
– I now provide the following answers: - 1 and 2. Yes. An amount of £26,300 has been approved for payment to the company. This represents an increase of £600 on the amount paid to the company last year. This amount was accepted by the company on 26th April and arrangements are now being made to pay it.
– On 15th August, 1961, and 4th April, 1962, Senator Hannan raised the matter of country of origin marking of goods from Soviet-occupied Germany. Under the terms of the Commerce (Imports) Regulations certain prescribed goods, such as foodstuffs, clothing, etc., must be marked with the name of the country in which the goods were made or produced. In addition, the Customs (Prohibited Imports) Regulations require that where goods have applied to them any marking in a language other than the language ordinarily used in the country of origin, the goods must have applied to them a qualifying statement in the English language indicating the country in which the goods were made or produced. In the case of Germany we have a position where the mere statement of origin as “ Made in Germany “ does not give a true indication of origin to the consumer of the goods.
For goods from the Soviet-occupied zone of Germany I have decided that the marking “ Made (or produced) in Germany (East) “ will be an acceptable indication of origin. The marking “ Germany “ or the name of a city is not acceptable.
Reports on Items.
– I lay on the table of the Senate a report by the Tariff Board on the following subject: - .
Electric clocks and parts including movements therefor.
I also lay on the table of the Senate a report by the Tariff Board on the following subject: -
Fabric dress gloves, which does not call for any legislative action.
The board’s findings in both instances have been accepted by the Government.
– by leave - The United States authorities have declared two danger areas - one based on Christmas Island and the other based on Johnston Island - in the Pacific in connexion with a series of nuclear tests planned by the United States. The Christmas Island area was declared with effect from 15th April and the Johnston Island area with effect from the 30th April.
In order to discuss all aspects of the proposed tests insofar as they might affect Australian air services, two officers of the Department of Civil Aviation had detailed discussions with United States experts at Honolulu last week. The Australian airline, Qantas, was closely associated with these discussions. It is clear from these meetings that the safety of Qantas services operating across the Pacific will not be affected in any way by the nuclear tests. However, some delays in the Qantas schedules will occur.
This arises principally from the fact that, according to United States predictions, the tests in the Johnston Island area will cause a blackout of communications over a wide area of the Pacific for a period possibly in excess of 30 hours. Once communications are restored, there will be a further interval before airline services can commence, to enable the transmission and analysis of meteorological data necessary for the planning and despatch of flights. During this period, without normal communications and supporting facilities, Qantas services will not operate.
Naturally, it is our concern to ensure that the least possible inconvenience to passengers is caused and we will be assisted in doing this by the fact that the United States authorities will give three to four days warning of tests in the Johnston Island area. I should mention that the Christmas Island tests will not affect Qantas schedules.
Because of the important effect which the Johnston Island tests can have on Qantas services, the Government is maintaining close touch with the United States authorities in Washington on all aspects of the tests which might affect those services.
Motion (by Senator Spooner) - by leave - agreed to -
That Senator Reid be granted leave of absence for one month, on account of ill health.
Motions (by Senator McKenna) - by leave - agreed to -
That Senator Toohey be granted leave of absence for two months, on account of ill health.
That Senator Ridley be granted leave of absence for two months, on account of ill health.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Wade) read a first time.
.- I move-
That the bill be now read a second time.
This bill and the two wool tax bills to follow it are complementary. Their purpose is to amend the existing wool tax legislation so as to extend the present rate of levy paid by wool-growers to finance wool promotion activities for a further period of twelve months, that is from 1st July, 1962, to 30th June, 1963. At a joint meeting on 4th April between the Australian Wool Bureau and the two federal organizations of wool-growers represented on the bureau, namely, the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation, it was agreed by the three bodies to recommend that the current wool promotion levy of 10s. a bale on all shorn wool produced in Australia be continued for another year. The Government is, therefore, now acting in accordance with the wishes of the woolgrowing industry.
Honorable senators will recall that in August last year, at the request of woolgrowers, legislation was passed to increase the wool promotion levy from 5s. a bale to 10s. a bale. The industry then requested that the higher rate of levy operate only until 30th June, 1962. At that time it was expected by the industry organizations that the findings of the Wool Marketing Com mittee of Inquiry would be available for consideration by the industry somewhat earlier than has been the case.
The report of the Wool Marketing Committee of Inquiry which was tabled on 7th March supported the case for the provision of increased wool-grower funds for wool promotion purposes. The committee drew attention to the important influence of factors affecting demand on the level of wool prices and stated, inter alia -
I think it is fair to say that over the years most Australian wool-growers have been fully conscious of the need to provide funds for wool promotion. This industry appreciation of the value of promotion is reflected in the fact that the rates of levy for this purpose have increased progressively from the original 6d. a bale in 1936 to 2s. in 1945, 4s. in 1952, 5s. in 1960 and 10s. in 1961.
It has been necessary to maintain Australia’s share of the increased funds required by the International Wool Secretariat to pursue its intensified programme of wool promotion in many countries. In addition, increased funds are required to finance the higher level of wool promotional activities within Australia.
As I think honorable senators generally are aware, the International Wool Secretariat comprises representatives of the Australian Wool Bureau and the Wool Boards of New Zealand and South Africa. Following a reconstitution in 1960, the secretariat is now governed by a board consisting of the seven members of the Australian Wool Bureau and three representatives each of the Wool Boards of New Zealand and South Africa, a total of thirteen members in all. Australia’s majority representation on the International Wool Secretariat is a recognition of the size of the contribution by the Australian woolgrowing industry to the cost of maintaining the secretariat. Australia actually contributes 62 per cent, of the total funds of the secretariat compared with 24 per cent, by New Zealand and 14 per cent, by South Africa.
Total expenditure by the International Wool Secretariat in 1961 from contributions by Australia, New Zealand and South Africa was in the region of £A.3,100,000, whilst substantially increased expenditure is envisaged in 1962 and later years. In addition, about £A.1,000,000 was contributed by sections of the wool textile industry in various countries for joint promotional activities with the secretariat.
The proceeds of the existing 10s. a bale levy in Australia, based on a wool clip of approximately 5,000,000 bales, amount to about £A.2,500,000 per annum. In recognition of the heavy commitments facing Australia for funds to finance increased wool promotion, both in Australia and overseas, the Australian Wool Bureau had previously conveyed to the Minister for Primary Industry (Mr. Adermann) its recommendation that the existing rate of levy for wool promotion of 10s. a bale, with proportionate charges for smaller parcels of wool, should operate for a further year following 30th June, 1962. As I have already stated, the wool bureau’s recommendation has now been supported by the two major federal wool-grower organizations. It is essential that this legislation be passed in the current session of Parliament, since the industry wishes the present rate of levy of 10s. a bale to continue uninterruptedly until 30th June, 1963; otherwise, the levy would revert automatically to 5s. a bale as from 1st July, 1962, which I am sure would be generally regarded as a retrograde step.
The Wool Tax Assessment Bill repeals such sections of the principal act as are now redundant because they applied only to the furnishing of special returns covering wool sold up to 28th August, 1961. I explained that position in my second-reading speech on the bills before the Senate last August. The bill also calls for a modification to the normal quarterly return which will be submitted by wool-selling brokers for the quarter ending 30th June, 1963, so that the 10s. per bale rate will apply only to wool sold on or before that date. This is a similar provision to that originally made in respect of the return for the quarter ending 30th June, 1962, under the existing legislation.
At a later stage I propose to introduce Wool Tax Bill (No. 1) and Wool Tax Bill (No. 2). I think it may be appropriate at this point to say for the information of honorable senators that these measures are complementary, and that the need for two separate bills arises from a constitutional requirement. This bill and the complementary wool tax bills accord with the wishes of the two major wool-grower industry organizations and the Australian Wool Bureau to assist in the task of stimulating the demand for Australian wool at home and abroad through intensified promotion work. I commend the bill to honorable senators.
Debate (on motion by Senator O’Byrne) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Wade) read a first time.
.- I move-
That the bill be now read a second time.
The purpose of this bill is to extend from 30th June, 1962, to 30th June, 1963, the application of the current rates of wool promotion levy on wool received by a broker or dealer. The rates are 10s. per bale, with proportionate amounts for smaller parcels. As I said in my second-reading speech on the Wool Tax Assessment Bill, this measure is complementary to that bill and I commend it to honorable senators.
Debate (on motion by Senator O’Byrne) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Wade) read a first time.
– I move-
That the bill be now read a second time.
The purpose of this bill is to extend from 30th June, 1962, to 30th June, 1963, the application of the current rates of wool promotion levy on wool exported for sale overseas without passing through the hands of a broker or dealer. The rates are 10s. per bale, with proportionate amounts for smaller parcels. As I said in my secondreading speech on the Wool Tax Assessment Bill, this measure is also complementary to that bill and I commend it to honorable senators.
Debate (on motion by Senator O’Byrne) adjourned.
Debate resumed from 12th April (vide page 980), on motion by Senator Wade -
That the following paper: -
Netherlands-Indonesian Dispute - Statement by the Minister for External Affairs, dated 15th March, 1962- be printed.
– It is not my intention to delay unduly the discussion on this matter. I remember that when the statement was delivered in another place by the Minister for External Affairs (Sir Garfield Barwick), and in this chamber by Senator Wade, it aroused a great deal of interest throughout Australia. But there is a tendency on the part of people generally - I do not exclude honorable senators - to lose interest, to some extent, after the delivery of such a statement. I think we all realize that the happenings to our immediate north bring foreign affairs very close to us. For that reason I feel impelled to speak to the statement which has been before the Parliament for some time.
All honorable senators know that the subject under discussion is Indonesia’s claim to incorporate West New Guinea, or West Irian as it is sometimes described, in Indonesia’s territory. The claim has been made that as West New Guinea was one of the Netherlands’ colonies it now rightly belongs to the Republic of Indonesia. This claim has been the subject of dispute for a very long time. We are indebted to the speakers who so far have participated in this extremely interesting debate both in the House of Representatives and in this chamber. We owe a debt of gratitude to the Minister for the Navy (Senator Gorton) who, in his capacity as Minister assisting the Minister for External Affairs, has taken such an active part in foreign affairs and who has approached this matter in such an intelligent way. I do not exclude from my remarks the speeches of some honorable senators opposite, but most of the speeches on this subject have come from this side of the chamber. We are indebted also to Senator McKenna for his very lucid explanation of his party’s viewpoint on this question. I believe that we should approach this matter on a non-party basisas Australians and as members of the National Parliament. We should present to the world at large an Australian viewpoint.
We all appreciate how vital it is to Australia that this problem should be resolved without resort to hostilities or bloodshed. For that reason we should do all in our power to expedite negotiations between the countries concerned to achieve a peaceful solution of the problem. Our differences as members of the Parliament, both in the Senate and in the House of Representatives, are comparatively minor. In fact, they are superficial. The problem which now confronts us is international in character and of great magnitude, but it is a problem which it should not be impossible to solve. We desire sincerely that a solution will be achieved without recourse to war and the consequent disruption that follows upon a war.
In the course of the debate it has been interesting to hear various speakers trace the historical background to this dispute between Indonesia and the Netherlands. Their remarks have related to the period immediately following World War II. Most of us are fairly familiar with the incidents that have taken place since the conclusion of hostilities, and with Indonesia’s resurgence, if I may put it that way. Indonesia seized the opportunity to become a republic and to throw off the yoke of the colonial power, the Dutch. I suppose that is understandable. It is understandable to me because the Dutch have not been conspicuously successful as a colonial power. I am not suggesting that they have not been successful as far as they themselves are concerned. They have undoubtedly gained very great wealth from their colonial possessions, but they have not been as successful as they might have been from the point of view of their treatment of the peoples whom they have controlled.
I have a great admiration for the Dutch as a people. They are a redoubtable people. History shows that they have played a valiant part in world affairs. England was in conflict with the Dutch for centuries dating back to the early struggle for naval supremacy. The Dutch have always been great navigators and great explorers and a most industrious people. However, their colonial record is not a happy one. Even the position in South Africa can be considered in this connexion. The temperament of the Dutch has had a large bearing on their attitude to their colonies. We know the extremes to which the, now, Republic of the Union of South Africa has gone in applying the principle of apartheid. I do not suggest for one minute that the Dutch are wholly responsible for this, but I think that the temperament of the Dutchman has some bearing on the matter. The Dutch as a nation have come in for a good deal of criticism by other people for the way they have administered their possessions.
– They are a bit slow to learn.
– I think that may be the case. They have even introduced a religious aspect into their administration of colonial peoples. That is a completely false approach. I do not know whether it is the general opinion of historians that this has been the case, but I have read that the policy of apartheid in South Africa has almost a religious background.
The Indonesian people were under the control of the Dutch for many centuries. As I have said, the Dutch were great navigators. Place names around the Australian coastline are an illustration of the superb navigation powers, the ability, and dauntless courage of the early Dutch explorers. The Dutch controlled the Netherlands East Indies for many years but latterly there was considerable unrest among the Indonesians, particularly the Javanese. It seems that the circumstances of the Second World War gave the Indonesian people their opportunity to gain self-determination.
I rather deplore some of the statements that have been made about the West New Guinea dispute by people in high places. It is to be regretted that Mr. Calwell should have made what might be called a rather sweeping statement about President Soekarno. Mr. Calwell, described Soekarno as a pro-Japanese collaborator. I do not know Soekarno. I know only what I have read about him in the press. I know that he is a gifted orator and has the power to carry a crowd with him. He undoubtedly possesses great influence over the Indonesian people, but to describe him as a proJapanese collaborator was, perhaps, to use an extreme term.
– General Rankin called him that.
– That may be so, but I am not talking about General Rankin; I am talking about the recent utterance of Mr. Calwell. I have great respect for Mr. Calwell and I do not want to criticize him. I think we all make statements that we regret afterwards. President Soekarno is a man of great ability. He has great histrionic power and eloquence and has very great control and influence over the Indonesian people. The Japanese occupation continued over a number of years, and perforce Dr. Soekarno had to collaborate with the Japanese. At the same time we know that he did not like the Dutch, and at the conclusion of hostilities, when the Japanese were defeated, Dr. Soekarno saw the opportunity to get rid of the Dutch from Indonesia as a whole and from Java in particular. We must recognize that Indonesia does not consist of Java only but covers a multitude of islands containing a population of about 90,000,000 people. It is a vast nation which has a tremendous potential for either good or evil in the world to-day.
President Soekarno, because he disliked the Dutch and all things related to Dutch colonial rule, seized the opportunity, at the conclusion of hostilities, to declare Indonesia to be a republic. She became a separate entity in world affairs, but not without difficulties. The Dutch left Indonesia with comparatively few trained personnel for administration. The difficulties undergone by the Indonesian Government called for almost superhuman effort. Apart from internal difficulties of finance and administration, there were rebellions in various areas, probably - although I do not know for certain - inspired by outside influences. But, as we all know, Indonesia, in spite of these difficulties, made progress and her status as a nation has steadily grown until to-day that country of 90,000,000 people exercises a very considerable influence in world affairs, particularly upon Australia, her nearest neighbour.
In the political set-up we saw the growth of various parties, not the least of which is the Communistt Party, which is a recognized body and has played quite a considerable part in the nation’s politics. We must not ignore that factor. All of us on both sides of the chamber agree on the menace of international communism. I am not one of those who see a Communist behind or under every bush. Far from it. But I believe that there will always be such persons in most communities. While we have a high degree of prosperity throughout our economy, I do not fear to any great extent the advance of communism in our midst; but I do not ignore the fact that international communism is a very important factor, and we must be constantly vigilant against its spread. It has a profound influence on many backward countries. Indonesia, in common with other countries with a low standard of living, has had a problem in relation to the spread of communism. But Indonesia is mainly a Moslem country. I think that that is the greatest safeguard against the spread of communism there. Moslem communities do not readily absorb Communist ideas and ideologies. There is a great safeguard in the fact that Indonesians, in the main, subscribe to the Moslem religion.
– I think you could say that that merely provided a balance against the strongly regimented Communist Party in Indonesia.
– I agree with Senator Maher that it does provide a balance; and therein is some hope that communism will not take over entirely the government of that country. I have been a little disquieted by the news of the last couple of days. It is suggested that Dr. Subandrio will make a visit to Russia. Possibly Dr. Soekarno himself -may have some sort of truck with communism. But I am glad that General Nasution, one of the principal persons in Indonesian affairs, is a man upon whom we may rely for opposition to the spread of communism by every means at his disposal. Indonesia has had a fairly close relationship with Russia. It has been to her advantage to gain certain military, naval and air force supplies.
– And capital goods.
– That possibly is the case, but let us not forget that we too have supplied capital goods to Indonesia. She has relied to a large extent for her own armed services upon supplies that she could probably obtain on favorable terms from Russia. It has always been the policy of Communist countries, particularly Russia, to intrude in such matters if possible. It is to their advantage to do so. I think that the great bulk of Indonesian defence material to-day is standardized on the Russian pattern. We must realize that there has been quite a deal of negotiation between Indonesia and Russia not only from the defence angle but also from the political angle. We know exactly how Communists have intruded into these matters, wherever possible, in many countries.
It is interesting to trace the history of the Dutch occupation of Indonesia. The Dutch were able to maintain only a tenuous hold on West New Guinea. In Holland there has been a desire on the part of government authorities to relinquish their interest in that territory. Having lost the East Indies, there is a tendency amongst the Dutch to believe that it may be to their advantage to get rid of West New Guinea. That has been accentuated in recent months. Certain elements in Dutch political circles have been very insistent upon relinquishing the territory. In Dutch Labour Party circles there has been a demand for urgent negotiations with Indonesia with a view to vacating the territory. We have noted the threats made by Dr. Soekarno in recent months and the reaction to them of the Dutch authorities. We have noted the! Dutch resistance throughout the negotiations. As pointed out by Senator Gorton, in 1961 there was a change of attitude by the Dutch authorities to West New Guinea.
I recall with interest the visit to Australia of Dr. Subandrio. We know that he was in conference with the Government of Australia on this important question of West New Guinea. On his departure from Australia, a communique was issued concerning the negotiations that had taken place between him and the representatives of our own Government. The communique stated that Australia would continue to recognize Netherlands sovereignty and the principle of self-determination in West New
Guinea, but if any agreement were reached between the Netherlands and Indonesia as parties principal, arrived at by peaceful processes and in accordance with internationallyaccepted principles, Australia would not oppose such an agreement.
I do not remember exactly when Dr. Subandrio was in Australia, but I think it was a couple of years ago. At the time he was here, I had the feeling that we were dealing with a very astute gentleman. The communique to which I have referred indicates that the negotiations were not altogether unfavourable to Indonesia. Since that time, we have seen a gradual stiffening of the Dutch attitude, mainly as a result of threats that have issued from the mouth of Dr. Soekarno. He has made some bellicose statements. I think it is understandable that a proud country like the Netherlands would not take too kindly to such statements and threats. Although the Dutch say they are still prepared to vacate the territory on reasonable terms, they have brought more into focus the question of self-determination for the indigenous people of West New Guinea. The principle of self-determination is one with which most of us in this place heartily agree. We all feel that the interests of the indigenous people of West New Guinea must not be overlooked.
When General Nasution was here, he made a very favorable impression on most of the people with whom he had contact. I did not have the pleasure either of meeting him or of seeing him, but from press reports and from reports which emanated from Government circles, it seems that he made a favorable impression. He said that there would be no retreat from Indonesia’s claim to West New Guinea, but there would be no resort to force. He made that unqualified statement. For reasons best known to themselves, the Indonesians have departed from that principle. I do not think that General Nasution would agree with that departure. Certain events have occurred in West New Guinea waters which give us, as a nation, cause for concern, the reason being plain for all to see.
We have a particular interest in the great island of New Guinea. We take great pride in our administration of the trust territory and in the achievements that have been attained. What we have done for the indigenous people of that area is nothing short of remarkable. I have not had the opportunity to visit the Territory of Papua and New Guinea since 1954, but even then I saw the remarkable progress that was being made in the development of the primitive inhabitants. If the Republic of Indonesia were to acquire possession of West New Guinea, there undoubtedly would be complications for us in the peaceful development of the areas adjacent to West New Guinea which we administer.
There is no assurance that the Indonesians, if they were able to seize West New Guinea, would not intrude into territory occupied by us and which we administer under United Nations trusteeship. WS know that if Indonesia were to occupy West New Guinea, that would be a form of colonialism comparable to the colonialism of the Dutch in their former occupation of Java. I do not think there is the slightest ethnological association between the Indonesians and the Papuans. We have no assurance that the Indonesians would carry on the process of developing the backward and primitive peoples of West New Guinea, a process which has been initiated in recent years by the Dutch.
The Dutch may take a certain amount of credit for having changed their attitude towards the primitive people of the area. They have done a good deal to improve the standard of living of the indigenous people. In fact, I understand that that is one of the reasons why certain Dutch interests want to see a Dutch withdrawal from West New Guinea. They believe that the annual cost of maintaining the area - something like £10,000,000 - is too great. Of course, such an amount should be a mere bagatelle to a wealthy country like Holland. Although Holland does not occupy very much land space it is a highly industrialized country, with great financial interests throughout the world. Nevertheless, there is a desire on a part of a section of the Dutch people that a withdrawal should be made from West New Guinea. However, the Dutch Government, fortunately I think, has looked at the matter realistically and has decided that any relinquishment of administration must not be made at the expense of the indigenous peoples. The Dutch Government feels that the people of West New Guinea should be assisted towards self-determination. We most heartily agree with that view.
Senator McKenna gave a very clear outline of the negotiations that have taken place at the United Nations. Senator Gorton also referred to United Nations’ activities in connexion with this dispute. I have seen something of the way in which the United Nations works and 1 know that in many cases negotiations are protracted. Results are not achieved in a day, but that does not entirely destroy my faith in the United Nations. I believe that bi-lateral negotiations should take place. Unfortunately, not a great deal of progress has been made in these bi-lateral negotiations. 1 was very pleased to see the appointment of Mr. Bunker as mediator in the dispute. He made a constructive proposal about the transfer of sovereignty from the Dutch authorities to the Indonesian authorities. However, for reasons best known to themselves, the Indonesians are not prepared to accept Mr. Bunker’s proposal. Mr. Bunker suggested that Indonesian administrators take over the administration of West New Guinea but under the control of a United Nations trusteeship council. I thought that was a very reasonable proposition. I thought it would prove to be satisfactory, at least in the transition period, but it is not acceptable to the Indonesian authorities and a stalemate has been created. 1 do not know the solution to the present problem. What we read in the press gives very little cause for optimism. I think that ultimately something will be done enabling transfer of sovereignty to take place amicably, but I do not know how this can be achieved. Perhaps further negotiations will take place with Mr. Bunker acting as mediator. Perhaps, as Senator McKenna suggested, this matter will be further considered by the United Nations. If this matter is not resolved satisfactorily and soon, it should be raised once more before the United Nations. After all, of what use is the United Nations as an organization if we do not take matters such as this before it? Although the United Nations is slow to reach decisions, at least matters such as this are discussed. While they are being discussed the likelihood of war breaking out is reduced.
Although negotiations before the United Nations are protracted, I feel that ultimately this problem can be solved by the United Nations. As some honorable senators may know, 1 have had a little experience of the workings of the United Nations. I know how protracted discussions before the United Nations can be. I know how delegates wishing to sponsor a resolution sometimes work for days and even weeks before they can obtain a co-sponsor. I know of the long delays before a resolution can be discussed at the political committee level or in the plenary session of the General Assembly. However, I do not despair that some satisfactory solution will be reached. First, I would like to see a satisfactory bilateral solution. Surely there are reasonable people in Indonesia as well as in the Netherlands - people who know that the ultimate desire of the Netherlands is to get out of West New Guinea. I sincerely hope that some solution that will protect the rights of the indigenous people will be reached.
Australia must view this problem with the utmost seriousness. We in this country should not make statements that may hinder negotiations towards a settlement of the dispute. In Holland recently Dr. Luns, who is, I think, Foreign Minister, said -
The Government would certainly applaud it if a solution to the dispute were to come about through a vote of the General Assembly of the United Nations.
That, of course, was conditional upon Indonesia being willing to take reasonable account of the wishes and interests of the Papuans. That should be the ultimate objective of all sensible people in dealing with this matter.
This matter is serious for Australia, occurring as it does in an area just to our north. Sir Garfield Barwick’s statement on this matter was, I think, the first that he made as Minister for External Affairs. Certainly this is the first occasion on which 1 have had the temerity to speak in a debate on international affairs. I have referred, of course, to international affairs during speeches on other subjects but I have never before addressed myself to a question such as the one that is now before the Senate. Australia is on friendly terms with Indonesia at present. I want to see a continuation of those friendly relations. I understand that the Indonesians are an extremely happy race. They are a very lovable people. We may think that at present they are very badly led; but they have national aspirations. We cannot deny them those aspirations.
The great bulk of Australians are and always have been on splendid terms with the Dutch people. We have a great admiration for the Dutch nation. We want to maintain our friendship with the Netherlands and its people. At the same time, we must not ignore our responsibility to the indigenous people of Papua. It is of paramount importance that the people who live in West New Guinea should be given the same opportunities as we are trying to give the people who live in the part of the island under our administration. Their interests must not be overlooked in the conflict between the two principal parties in this dispute.
I conclude my remarks by saying that, although I may not have offered any concrete proposals for solving this difficult problem, I believe that among men of goodwill there are ways and means of settling disputes without recourse to the horror of war. As I have seen it in my comparatively short life, war has achieved very little, if anything. It brings horror and misery in its train. We do not want those things to bc brought into our immediate area. I have faith in the way the Government is handling this difficult problem. Any good offices that we can use to achieve a solution of the dispute will be for the benefit not only of ourselves but also of the world as a whole.
.- Mr. Acting Deputy President, we are dealing with a question relating to West New Guinea. I am unable to say precisely what that question is. I hoped to learn from the debate why the Indonesian Republic desires to control West New Guinea. After listening to all the discussion that has taken place in this chamber, I have to say that I have failed to learn the reason. Senator Hannaford has the ability to deal with a subject in a practical way. Usually he is able to state a case so that the typical member of the Parliament and the typical member of the public can understand the question involved. But, as I stand here, I fail to understand why the Indonesian Republic wishes to take charge of West New Guinea.
– The Indonesians say that at the time the Dutch left it was part of Indonesia.
– I think you will agree with me, senator, that that is a very faint claim. I know that prior to 1948 and for the past fourteen years Dr. Soekarno has stated repeatedly that West New Guinea rightly belongs to the Indonesian Republic. As Senator Maher has just stated, the strongest claim that Indonesia appears to have to West New Guinea is that it was part of the Dutch empire prior to the establishment of the Indonesian Republic. I wish to point out to the Senate how that republic was established. Was it not established in accordance with the principles of the Charter of the United Nations? Had there been no United Nations and no Charter, probably there would be no Indonesian Republic to-day.
Now let us consider the country about which we are speaking. There is no need to consider what the resources of the Indonesian Republic are and what standard of living is enjoyed or suffered by the people of that republic. I will deal only with the people of West New Guinea. The first question that arises is: How many natives are in West New Guinea? There are 400,000 natives under the control of the Dutch administration and 300,000 natives living in primitive conditions. They are the most primitive people in the world to-day. They are living in the most forbidding country and the most underdeveloped country in the world. That is the country and those are the people that the Indonesian Republic wishes to take over.
I have heard it said on many occasions that all wars are trade wars. When I delve into the question of why the Indonesian Republic wishes to take over West New Guinea, I examine the resources of West New Guinea. I find that they are very poor indeed. A little trading is done by the natives around the coastal regions, but only in some parts of the coastal regions. The interior is almost totally undeveloped. Where the 300,000 primitive people are living, mechanical devices consist of nothing more complicated than a yam-stick. The Dutch have been there for a number of years. They have established certain centres. Hollandia is one of them. There is a certain amount of development in the vicinity of that town. Oil has been produced in West’ New Guinea and crude oil has been exported. Drilling has been going on for a number of years, but certainly no oil is being produced there at the present time.
– Their oil wells have dried up.
– They could probably be resuscitated. If Australia sent its drilling geniuses there and they sank bores as they have done around Moonie, they might find oil in greater quantities than those in which it is being found in Queensland at present. However, I am thinking now of the country itself. It is very difficult for any one who has not actually seen it to imagine what type of country it is. Without visiting the villages and camps of these people and seeing the conditions under which they live, it is difficult for any one to understand how primitive human beings can be.
Senator Hannaford had something to say about the development that has taken place in the Territory of Papua and New Guinea - the portion of New Guinea that is under the care of the Australian Government. Admittedly, great progress has been made over the past twenty years in that Territory; but I recall that in 1953-54 patrols visited certain areas of New Guinea, which had then been under the administration of the Commonwealth Government for a number of years, and made certain findings in respect of the health of the natives. I shall state some of the findings so that honorable senators will understand clearly the seriousness of the complaints and will be able to obtain an idea of bow those 300,000 people are living at present.
– There are 800,000 people, are there not?
– I said that 400,000 were under the Dutch administration and 300,000 were living in a wild state. That gives a total of approximately 700,000 and there may be a few more, but I shall leave it to Senator Hannaford to go and count the number of people if he wants mc to be strictly correct in my statement. During 1953-54 there were 136 medical patrols in New Guinea.
– That is in east New Guinea?
– Yes, east New Guinea. The Dutch carry out patrols but not to the same extent as our Government does. A total of 235,000 people from 1,974 villages were examined. I want to make it clear that I am not claiming that the total population was examined. As a result of the examinations, it was found that there were 6,982 cases of yaws, 2,952 cases of tropical ulcers, 14,464 cases of skin disease, over 200 cases of tuberculosis, and 289 cases of Hansen’s disease.
– Do you know what that is? It is leprosy.
– I know that, but I am giving the complaint its correct name. Do you wish me to inflate the figure and misrepresent the position?
– No, but I thought you did not know what Hansen’s disease is.
– Well, I do. There were 1,600 cases of eye disease. There is a sickness in the area known as New Guinea mouth - it does not resemble Senate mouth in any way. There were 436 cases of New Guinea mouth, 641 cases of disease resulting from insufficient nutritional foods, and 1,600 cases of a disease known as filariasis. The examinations revealed 14,000 cases of hookworm. 1 suppose most honorable senators know that hookworm is the result of lack of private and public hygiene. There were 95 cases of gonorrhoea and 20 cases of a similar complaint. Then there were 11,000 cases of unspecified diseases, making a total of nearly 56,000 cases of disease found by medical examination in that area in 1953-54. I am confident that since then similar examinations in the same villages have disclosed a reduction in the number of cases of disease, but I want to point out that in West New Guinea, the country which the Republic of Indonesia wishes to take over, 300,000 people who perhaps have never seen a white man are living in primitive conditions arid 400,000 people have not had the advantage of the administrative control that the natives in east New Guinea have had for the past 40 or 50 years. These are the people whom the Republic of Indonesia wishes to control.
I want to know why Indonesia wants to control them. Why does it want to take over this forbidding, disease-ridden country which almost is without a single resource? There may be timber stands in some of the islands off West New Guinea, but I understand that in West New Guinea itself the timber reserves are very poor.
So I leave the question unsolved. I do not know why Dr. Soekarno claims West New Guinea and I do not know why he wants to take it over without delay. I agree with Senator Hannaford that there must be some means by which the United Nations can open up the question and resolve it to the satisfaction of the people of the world. This is not a minor local matter. Perhaps we have no right to say that the Republic of Indonesia should not take over West New Guinea. Perhaps we have no right to say that the Indonesian people should not inhabit West New Guinea. But that is not my point. What I say is that if Indonesia wants to take over that tract of land which has a population of 700,000 people she must do so according to modern practices, not according to the old-fashioned method of resorting to war. So I must leave the question unanswered. I do not know why the Republic of Indonesia wants to take over West New Guinea.
I hope that something -.vill happen within the next month or two which will lead to the matter being settled in a proper way. I understand that at present Dr. Soekarno’s Government is under a great strain because of widespread famine in his country. I sympathize with him and his people. While they are suffering I hope they come to understand to some extent how the native people of West New Guinea have been suffering for a number of years. If Indonesia were in a position to do better for the indigenous people of West New Guinea than has been done for them in the past, I would be the first to say, “ Go in and do better than the Netherlands Government has done over the years “; but I am far from convinced that Indonesia can do so. If the day arrives when the Republic of Indonesia takes control of West New Guinea, assimilation will follow almost immediately. It will be easy for the Indonesians to assimilate the native population. I look at the matter in this way: I think of the number of illiterate people in Indonesia and of the number of illiterate people in West New Guinea and I conclude that assimilation would be an easy problem to solve. However, Mr. Acting Deputy President, I must leave my question unanswered.
Senator WILLESEE (Western Australia) has participated in the debate has indicated, it is extremely difficult to grapple with the problem which we are discussing, particularly as it does not involve Australia directly, primarily because this has been a continuing problem between the Netherlands and Indonesia for the past twelve years. Be that as it may, it has been obvious for that time to every one except this Government that we could not sit idly by and eventually avoid becoming involved in this dispute. Any international movement to-day which has the seeds of a future war - any one can recognize those seeds in the fast-moving world in which we live - cannot be ignored by Australia. Just as we cannot ignore the Berlin situation or the Laos situation, so we cannot ignore the Indonesia-Netherlands situation in relation to West New Guinea. We have been involved in the past and we will be involved in the future whether we like it or not. In addition, we shall not have the aid of those countries or organizations on which we usually have leaned. The actions of this Government since it took over in 1950, just after the birth of the Indonesian nation, have been a history of lost opportunities. When the Government was elected, a great basis of friendship had been established with the Indonesians. That friendship began when the Labour Government of the day - if I recall correctly, Senator McKenna was the acting Minister for External Affairs at that time - referred the Dutch “police action”, as it was called in those days, to the United Nations. That move by Australia brought about a cessation of hostilities and led to the birth of the Indonesian nation. But Australia did not act primarily for that purpose. We acted, as we would do to-day, to prevent aggression. We were a member of the Security Council and a country close to the area of hostilities. Our action was taken primarily to prevent aggression and to prevent a war in a region close to us. The conclusion is inescapable that when we took that action the United Nations then stopped the stronger force from attacking the weaker one. It was that action above any other which, in those troublesome days, enabled Indonesia to become a nation.
This basis of friendship, established as far back as that time, was cemented by many other minor things that I need not mention.
Indonesians will mention them quite readily. We acted for them on various international commissions and that type of thing. This great basis of friendship could have been built upon, but until the last few years the Australian Cabinet - I say the Cabinet because 1 do not want to include all the people who sit opposite, particularly some of the back benchers - adopted a completely anti-Asian attitude.
Santor Maher. - Can you offer any evidence for that statement?
– Just rest your soul in patience and I will offer quite a lot of evidence. I would have thought that the honorable senator might have been one of those who would have been critical of the Government, and particularly of the Prime Minister. I exclude from blame, to a large degree, our former Minister for External Affairs, now Lord Casey. Obviously Lord Casey’s hand was restricted by Cabinet. This was shown to be so in the Suez incident
When he disagreed completely with Britain’s and Australia’s attitude, but was loyal enough to stick to the decision of his party. He and Mr. Menzies were diametrically opposed on the question of Suez. Because of that Lord Casey was hamstrung and sidetracked. He became involved in the Colombo Plan rather than in political and diplomatic actions that should have been taken during those years. The honorable senator asks for some evidence. For ten years Mr. Menzies flew to London every year to carry out his commitments as Prime Minister. Not once did he drop into any Asian country. On one occasion when he was asked by the honorable member for Lang (Mr. Stewart) in another place whether he intended to invite Dr. Soekarno to Australia, because of the worsening relations between the two countries, the Prime Minister’s attitude was one of surprise that the conditions were worsening. He denied that they were. He gave no assurance that he would invite any Indonesians to Australia, and yet within a matter of months Dr. Subandrio, the junior partner, came to this country.
It is obvious that he told Mr. Menzies that it was time that he paid a visit to Indonesia. Instead of the move coming from the senior nation that had been established for over a century, it had to come from the young and battling country of Indonesia. The time when these exchange visits should have been taking place was in 1950-51 and 1951-52, when the world was ignoring Indonesia. Dr. Soekarno is now visiting several countries every year, but at that time nobody was extending the hand of friendship to him. No government was inviting him to visit its country and Australia lost the opportunity to do so. We should have made the first move to invite Dr. Soekarno to Australia, irrespective of what honorable senators opposite might think individually. After all, many of us disagree with the leaders of our country, but that does not make us any less patriotic. We have to deal with leaders of other countries from time to time, although we may not agree with their policies. If I had my way other countries would not be dealing with our present Prime Minister. There would be another Prime Minister with whom they would have to deal. Because I take that attitude it does not make me any less an Australian. In fact, I am probably a greater Australian because I take an interest in trying to improve the situation in my country. It was not just a question of considering Soekarno; anybody else could have been involved. Australia missed a golden opportunity in those days to take the lead by moving in and building up the friendship that had been established by a Labour government.
The Indonesians are people with whom it is easy to be friendly. They are a sunloving, easy-going and possibly lazy people. They are lacking in experience because they have been a subject people for so long. They have not had the opportunity of gaining experience in commerce, civil service, trade union affairs and things of that sort. To-day we find them inexperienced and hesitant to move into certain circles. Australia had the opportunity- to step in and do something about this. It was only after some nine or ten yearsI think it was 1959 or 1960 when Dr. Subandrio came here - that it was decided finally that our Prime Minister should visit Indonesia. Since then some Indonesians have visited Australia, but as a government we have not followed up the visit of the Prime Minister to Indonesia. That has been left to private people. Only a few weeks ago, representatives of the Sydney Indonesian-Australian Friendship Association made a visit under their own steam. They took some kangaroos over to the Bandung Zoo. Very few visits have been made by representatives of the Government, which has continued to show that petulance to Indonesia which it has demonstrated over the years. First of all, the Government ignored Indonesia and then there was the almost reluctant visit by Mr. Menzies, but there have been very few visits by other senior Ministers to that country.
During this period we have pursued, or have said that we were pursuing, a policy of cold storage. In other words we said that the dispute between the Dutch and Indonesians over West New Guinea ought to be placed in cold storage. We said that the two countries should not fight; that Indonesia should attend to other matters; that it should correct its high incidence of infant mortality, should deal with the problem of hygiene, the development of its economy, its education system and those million and one things which are crying out to bc attended to. That is not a bad policy provided the people to whom it applies hear about it and accept it. I have always doubted whether we have told the world that that is our .view, and I doubt very much whether we have told the Indonesians themselves clearly and in so many words. Some five or six years ago I discussed that type of problem in Indonesia and it seemed to me, an any rate, that my point of view received some acceptance. That was the obvious feeling at that time, but the Australian Government has sat back stubbornly doing nothing to implement its policy. It has been just hoping, like Micawber, that something would turn up.
We have had over the years, unfortunately, a terrifically bad press in both Indonesia and Australia. I do not suppose that the Government could do very much about that except that it does have its own means of propaganda. It has always seemed to me that a lot of false propaganda has come from Indonesia. Anything that is said in Australia about problems in Indonesia is always given headlines out of all proportion to the importance of the text. Any mention of the white Australia policy is always played up in the Indonesian press. Although it is not possible for democratic governments to control the press, probably something could have been done on a a government level over a period of time.
I do not want to dwell on the past. I merely place these matters on record because in my view the last ten years has been a period of lost opportunities. We have been trying to bolster the Dutch in that area, which is a mistake. In governmental affairs, as in personal affairs, it is difficult to make some one do something that he does not want to do. The Government has been sending emissaries to Holland in an effort to keep the Dutch in West New Guinea. It is true that the Dutch are devoting only £10,000,000 a year to financing the territory, but we must realize that until the development of the European Common Market Holland was in a bad way. It had lost the East Indies and it was experiencing a problem in regard to overpopulation. For some 300 years young people had been going to the East Indies and there setting up families and businesses. They had some land to which to migrate, but this was suddenly lost overnight. Until the development of the Common Market, the situation was worrying the Dutch.
I do not want to dwell on that period of ten years. Having sown the wind, we are reaping the whirlwind. We must face up to some stubborn facts. In talking to people1 who disagree with us on this problem, we find great difficulty in facing the facts. It is not of much use to talk in an airy-fairy way about what we would like to see done, to say that we would like to see the Dutch remain, or the Indonesians come in, and the Papuans given self-determination. There are certain facts that we cannot escape. There is no doubt that the Dutch want to leave West New Guinea. This Government’s mistake has been in trying over a long period to get the Dutch to do something that they do not want to do. Over the years we have been dismissing the problem by saying that Soekarno’s claim to West New Guinea was merely a device to bolster his own inefficiency at home. That has been one of the greatest mistakes in psychology that Australians have made. The Indonesians want Dutch New Guinea. A peculiarity of the Indonesians is that right from the kampongs they work almost entirely to a unanimity rule. There is no getting away with something by a simple majority. In consequence, all Indonesians to whom one speaks believe that when they took over the Netherlands East Indies they were taking over every part of it. It is a fact that this move is partly to tide over some of the inefficiencies at home, but let us not think that that is the only factor.
– Was there not a specific agreement as to West New Guinea?
– Yes, but that does not alter the psychology of the Indonesians. That is quite a different question. Let us not forget that by one agreement, which was never signed, it was agreed that West New Guinea should pass to the Indonesians.
– What reliance do you place on an agreement that was never signed?
– There has been a marked improvement in Senator Wright since the advent of the Perry Mason films; his cross-examination has improved. I state as background, because Senator Wright obviously has not studied the question, that there was at one time such an agreement. There was then that state of mind, and as Senator Wright, being a lawyer, knows, state of mind does mean something in contract law. The Dutch were willing to give the territory to the Indonesians. That agreement never came into force and now Senator Wright, as a lawyer, says that it was not legal. That state of mind did exist. The first agreement contemplated the giving up of the territory. The second agreement, which was signed and is therefore of interest to Senator Wright, provided a specific reservation for a period in relation to West New Guinea. There was not a complete embargo upon taking it over.
Be all that as it may, to-day the Indonesians believe, rightly or wrongly, that the Dutch retention of that toe-hold is an example of Dutch duplicity. This has had the effect of turning their minds away from their problems at home. Worse still, because they are spending such an inordinate proportion of their Budget upon arms, instead of putting this money into their economy, inflation is running completely riot. Certainly, their inflation over the last five or six years has been the worst in the world.
– Worse than ours?
– The cost of rice and flour has risen by about 1,500 per cent. Senator Courtice is happy to find that there is one country in which inflation is worse than it is in our country. He will be able to retire in June content in that knowledge.
– How much can the Indonesians spend on West New Guinea if they get it?
– Honorable senators opposite want to get around the point. We are dealing with the problem of psychology. I started by saying that there were certain facts that we could not ignore. I pointed out that when we try to get people to discuss the position they will not come down to these basic facts. The fact to which I refer at the moment is that the Indonesian people - not merely Dr. Soekarno - believe that they should have West New Guinea. When we talk to Indonesian members of the trade union movement, lawyers, professors, and doctors, we find that they really believe they are right. Whether we can get around the position on some legal principle does not alter the point that they really believe that they ought to have West New Guinea. That is the position with which the Government has to deal. If it had not been ignoring that fact for ten years, it would not be in the position that it is in to-day.
The third point that has been completely ignored by the Government is that every Asian country believes that Indonesia ought to have West New Guinea. The Government should come out of its airy-fairiness and appreciate the importance of that fact to Australia. It is important to us because for the whole of eternity Indonesia will be our closest neighbour. Instead of slapping it in the face, as this Government has done for ten years, we ought to take cognizance of the fact that at this bar of world opinion the belief is that Indonesia should take over West New Guinea. The United States of America have never come into this dispute at any stage, except to do what we should have done, that is, to assist the two parties to come to terms without aggression and do something for the people who inhabit the territory. Senator Hannaford raised the old bogy that if Indonesia got West New Guinea there would be no guarantee of non-aggression.
– That is not a bogey. 1 said that there was no guarantee.
– I am not misquoting you. Sennator Hannaford said tha: we had no guarantee of non-aggression. Of course, we have not. On the other hand, what right have we to ask for a guarantee of non-aggression? Why does he assume that there will be aggression? Senator Benn may have provided the answer unwittingly when he said that he could not understand why the Indonesians wanted to go into West New Guinea, and he gave reasons that ought to have convinced Dr. Soekarno. He instanced the poorness of the country, the bad hygiene, and so on. The answer is that the Indonesians want Dutch New Guinea because they want everything that the Dutch had. They say that when they were taking over the Netherlands East Indies they thought they were taking over every section. They say that they did not know that this or that island was to be excluded. West New Guinea, which was different from the rest of the East Indies because of its different form of government, was merely being put aside. We all know that that is common when negotiations are being conducted. The parties say, “ We agree on 95 per cent, of the points. Let us get those fixed up and talk about the other 5 per cent, later on.”
The problem of the Indonesians is to make proper use of the land they already have. They have an extremely wealthy country, but they need know-how. They want to get their farmers from the overcrowded large islands to the smaller islands, but because the people concerned have relatives living in the areas where they are at present, there is a degree of reluctance to move to the smaller islands. If the Indonesians are seeking territorial aggrandizement by their claim to West New Guinea, why have they not taken over the part of Timor which the Portuguese hold? The Portuguese have been on the island of Timor for many years. Surely the Indonesians realize, particularly after the incidents in Goa, that the Portuguese would be easier to push around than Australians, either on the mainland or in New Guinea. The Indonesians say that territorial ambition is not the reason that they want West New Guinea. If we study the
Indonesian attitude to the territory, whether or not we agree with it in the final analysis, we must admit that we come up against the stubborn fact that the Indonesians genuinely believe that they should have West New Guinea. There is no evidence that they want to push on and take over the rest of New Guinea.
Senator Hannaford mentioned communism. He said that if the Indonesians gained control of West New Guinea there would be a danger of communism in the area. He said that Soekarno had flirted with the Communists, and so on. Of course, there is a danger of communism in any part of the world to-day. Where there are starvation and poor living conditions there is an even greater chance that communism will appear. The Communists will make mischief in Indonesia, in West New Guinea and in the rest of Asia, whether the Dutch stay in West New Guinea, whether the Indonesians go there, or whether it becomes a United Nations trust territory. Whatever happens, there will be trouble from the Communists.
Senator Hannaford also said that he felt confident that the Indonesians would not turn towards communism because they are Moslems. I hope he is right, but I do not place too much faith on that fact. After all, it is a simple thing to become a Moslem; only one line needs to be spoken. No great religious background or training in a seminary is required. That is not the kind of thing that will withstand communism. If people have been accustomed for a long time to other people doing their thinking for them, they may readily accept aggression. It might be said, Mr. President, that the Philippines is a Catholic country. It is Catholic in name, as Indonesia is Moslem in name. I suppose that the people of the Philippines are 80 per cent, or 90 per cent. Catholic; yet they have lived under many different races. They have become a subject people. That is why they have accepted Spanish, American and Japanese rule. As Karl Marx said, many people in the world have nothing to lose but their chains. It is those people who may fall easily under Communist rule. But if we remove the conditions which lead to communism and give to the under-privileged countries more positive leadership than they have at the present time, the Communists will find it far more difficult to win them over. I say to Senator Hannaford that he should not place too much confidence in the idea that Indonesia will not become a Communist country because it is a Moslem country. I point out that Italy, where there is the greatest Communist vote outside Russia, is a Catholic country. The chances are that we shall not defeat communism by any specific thing such as religion. We shall defeat communism by beating the Communists to the punch. We have not done that in Indonesia in the last ten years.
If the Communists are going to move in, where will they move in first? As we well know, they will first move into the trade union movement. A few years ago, when I was speaking in this place, I said that I had’ taken the trouble to visit the trade union leaders of Indonesia. There was scoffing from the Liberal and Country Party supporters. I could almost see the thought forming in their minds - “If you went to visit the Indonesian trade unionists, you are nothing but a Communist “. When I came back from Indonesia I said that there was a great opportunity open to Australia. In the Indonesians we have a people who have not been brought up, as have the people of British countries, to accept trade unions and to fight for legitimate trade union causes. In Indonesia, leaders of the trade union movement have not been forthcoming. A kind of professionalism has developed. In one union there was a lawyer as president and another lawyer as secretary, simply because educated people who had come up through the ranks were not available. The professional people know all about the theory of trade unionism; they have read it in books. They know, perhaps, more about the theory than any member of the Australian Council of Trade Unions, I should imagine, but when it comes to organizing or to pressing the legitimate demands of trade unionism they do not have a clue.
About eighteen months ago the Australian Government invited a few Indonesian trade union leaders to come to Australia on a kind of goodwill tour. It did that instead of grasping the opportunity to attack communism in the way that it can best be attacked - by beating it to the punch. The Australian Government ignored that opportunity.
Sitting suspended from 5.46 to 8 p.m.
– When the sitting was suspended I was referring to the future of the indigenous people of West New Guinea. We all agree that those people should be assisted towards eventual selfdetermination. We all want to see them freely elect their own government and control their own destinies in the same way as so many other former colonial peoples have done since the last war. But the problem is how best to achieve that objective. In this case Australia finds herself on the sidelines^ - very close sidelines at that; sometimes the spectators are injured as much as the players. There can be no doubt that some day the indigenous people of West New Guinea will have a vote. It must be agreed that at present they are not capable of having a voice in government to any great extent. After all is said and done, many of the people who have achieved selfdetermination since the war have not greatly improved their lot in life in the process. In many cases they are probably worse off now than they were under the control of the colonizing power. But that is not the over-riding consideration. The over-riding consideration is that those people want to govern themselves. For some time to come the Papuans will have over them some form of administrative control other than their own. There may be some infusion of native control, such as the Dutch have been attempting to introduce in West New Guinea, as these people move towards final selfdetermination.
I submit that if Australia wants to see the people of West New Guinea governing themselves, it is not going the right way about the problem. It is no good standing outside the ring; you cannot throw effective punches from there. Far from moving away from the dispute, we should be moving ever closer to it. Australia should be playing a part in the negotiations that must inevitably take place between Indonesia and the Netherlands. America, at what she thought was the psychological moment, offered her good offices to assist negotiations. Hitherto America had been completely aloof in the matter. The fact that America failed as a mediator is no disgrace. Failures of that kind are commonplace. But the nation that should have been mediating in the negotiations is Australia. We are vitally interested in this problem. We have had a long association with the Dutch in this area and as long as the world rotates the Indonesians will be our closest neighbours. I would have preferred to see Australia acting as mediator in the negotiations. It is probably not too late for Australia to take this step.
When the drums are beaten some people are inclined to think that things will happen over-night. Six or eight weeks ago some people undoubtedly thought that the threatened invasion of West New Guinea by the Indonesians would take place. I have never placed much credence on Dr. Sockarno’s threats. Although my military knowledge is limited, I do not think any one will doubt that Indonesia would face a difficult task in attempting to invade West New Guinea. An invasion would involve the use of an amphibious force. Amphibious operations are never easy. The invaders would have to land on very uninviting shores. I think they would have a problem of logistics, because the Indonesians have been accepting arms from all over the world. It is difficult enough to train an army, navy or air force with standardized arms. I imagine that the problem confronting the Indonesians, with the variety of weapons they would be using, would be very great indeed. I do not know whether the weapons that have been supplied to the Indonesians are suitable for jungle warfare. Certain types of weapons that may have been supplied to the Indonesians would be quite useless in the jungle.
Senator Hannaford was concerned that communism may take hold in Indonesia. I think it is reasonable to assume, that the aim of the Communists is to push Indonesia into an invasion of West New Guinea. Failure of such an invasion would be a blow to the standing of Nasution, who is regarded by most people as more important than Soekarno. General Nasution impressed members of the Cabinet when he visited Australia recently and he has impressed those of my friends who met him. Obviously, if he and his army could be discredited, it would be a severe blow to the stability of Indonesia. We all know how some countries - Burma and Pakistan, for instance - lean heavily on the army. In those countries the army assumes the responsibility of education, particularly in the fields of mechanics and radio.
Australia must face up to the problem of West New Guinea. In this matter we are peculiarly alone. The United Nations has been unable to agree on the matter. The United Nations has been unable to find a formula for resolving this problem. The United Kingdom is not now greatly concerned about this area of the world. The United States has kept completely aloof. Every Asian country believes that the Indonesians should be allowed into West New Guinea. For the first time in international affairs Australia finds herself alone. We obtain no guidance from the United Nations. The United Nations can do little towards solving this problem unless a formula is devised that is acceptable to the Indonesians. I do not think there is much chance of that happening. After all, the last offer by the Dutch - to get out and pay £13,000,000 a year towards assisting West New Guinea to self-determination - was a fair offer. It was an offer which, in normal circumstances, should have been acceptable to everybody concerned, but which, because of the suspicion that has been engendered in Asian minds, was not acceptable. I do not think the United Nations will be able to solve the problem of West New Guinea.
Australia must move closer towards this problem. Australia should be the mediator in the negotiations. A few months ago when Soekarno was threatening invasion our reaction should have been one of horror that anybody in this enlightened age should contemplate the use of force to resolve differences. We should have said that because of our interest in this matter, and because of our great friendship for Indonesia over the years, we would be most willing to assist the parties to negotiate. We should have offered as mediator our Prime Minister or our Minister for External Affairs, if necessary. We should have offered to send a deputation from one or both sides of this Parliament if it would have assisted negotiations. Australia should not have stood aloof from this dispute. We should have moved in as quickly as possible and said: “ We do not stand for war. We belong to organizations that do not believe in war. We want to prevent such a situation developing. What can we do? What advice can we give? We have had a fair amount of experience in the Pacific area which will enable us to help you through this difficult period.” 1 close on that note, Mr. President. In spite of the valid criticisms that I make of the actions of the Government over a period of ten years - probably I have not been trenchant enough in them - and despite the history of lost opportunities, the invasion still has not taken place, we still have a stalemate, and the time is still opportune for the Australian Government to offer its good offices to Indonesia particularly, or to the two powers concerned, in an endeavour to bring about a peaceful settlement of this dispute in an area which is so near and important to us.
Question resolved in the affirmative.
Debate resumed from 12th April (vide page 966), on motion by Senator Paltridge-
That the bill be now read a second time.
– Since the end of the Second World War we have had a period unique in history in which multilateral agreements have been arrived at by various nations in an effort to assist, firstly, the war-torn countries of Asia and Europe and, secondly, after a period of time, to assist countries which are backward and have not been developed as well as some other countries have been. We have seen this not only in military agreements of the kind that we were used to before the Second World War, such as Seato, but also in what we might term quasi-military agreements, such as Anzus, and the establishment of the World Health Organization to tackle malnutrition and grapple with problems in the field of health.
In the bill that is before us to-night we see this principle of multilateral agreement in the International Bank for Reconstruction and Development. This bill seeks legislative authority for the Commonwealth Government to borrow from the International Bank 100,000,000 dollars, or £A.44,700,000. The loan will be for a period of 25 years, with interest at the rate of 5J per cent., which includes a payment of 1 per cent, into the bank’s funds.
The purpose of borrowing this money is made quite clear in the second-reading speech of the Minister for Civil Aviation (Senator Paltridge). This money is to be spent on a section of the Snowy Mountains scheme known as the Murray- 1 power station section. The magnitude of this section is important. The Murray-1 power station finally will generate 760,000 kilowatts of electricity. The maximum capacity should be reached in about 1967. The power station will come into production about twelve months before that. After the water has been used to turn these turbines, it will provide 440,000 acre-feet of water per annum which will be diverted from the Snowy River into the Murray River. I mention those facts to show the magnitude of the task for which this money is to be borrowed.
It is worth while noting the comparison of this section with the whole scheme. Finally, about £92,000,000 will be spent on this section. That includes the normal expenditure of the Snowy Mountains Authority, but does not include expenditure of almost £7,000,000 prior to 1st July, 1961. The amount already spent on the Snowy Mountains scheme is £181,200,000. The total estimated expenditure is £400,000,000. If my memory serves me correctly, the original estimate was about £240,000,000, but inflation has increased the figure to about £400,000,000.
After my saying that, Mr. President, you might say that it is strange that the Australian Labour Party should seek to oppose this bill. We certainly do not do so in any attempt to hinder the work that I have just mentioned. The history of the Snowy Mountains scheme shows that it was introduced by a Labour government in 1947. It is true that members of the Opposition of that day did their best to condemn the scheme with faint praise. Throughout the speeches of their leader was the thought that the scheme would never come to fruition and that it was merely a bit of window dressing or airy-fairy talk. The Opposition thought that the Labour government of that day would never get the States to agree to the scheme, that no water would ever be stored and no electricity ever generated from it. The real attitude of members of the present Government parties, which were the Opposition parties of that day, was shown by the fact that all of them, except two, boycotted the turning of the first sod. That showed their attitude to this socialistic scheme far more than their utterances as recorded in “ Hansard However, Mr. President, thank goodness that when they became the Government they did not pursue that attitude. They realized their mistake. Ever since they came to office they have been developing the scheme Labour started. A little later I will deal with the reason why we are opposing this bill. We believe that this work could be financed much more efficiently by other means.
I want to say something about the bank from which the Government is to borrow this money. A Labour government introduced the legislation under which Australia associated itself with the International Bank. That legislation was supported by the Opposition parties of that day. Mr. Chifley, in his capacity as Treasurer, made it very clear, when introducing the bill, that this bank was being formed to help, firstly, war-devastated countries and, secondly, countries that needed assistance. He went further in that speech and said that it was most unlikely that the Australian Government would ever be a borrower from this bank. If one reads the record of the debates of that day, one is left in no doubt that the spirt of the legislation was that Australia would not be a borrower from the bank, but would certainly be a lender. In the spirit of those times and also of the times in which we now live, that was a commendable attitude.
However, Mr. President, far from the Australian Government becoming an important lender to the bank, it has become one of its main borrowers. In fact, only recently the Australian Government relinquished the heavy-weight championship belt that it held. India has taken the title from Australia and is now a larger borrower from the bank than Australia is. There is some justification . for a backward nation with 400,000,000 people borrowing from a bank such as this; but I do not believe there is any justification for a country such as Australia using the resources of this bank for purposes of the kind for which Australia has borrowed from the bank over the past few years. This is the seventh loan that the Australian Government has received from this bank. I notice from the bank’s annual report for the year 1960-61 that in 1950 Australia borrowed 100,000,000 dollars, in 1952, 50,000,000 dollars; in 1954, 54,000,000 dollars; in 1955, 54,500,000 dollars, on 15th November, 1956, 9,230,000 dollars and on 3rd December, 1956, 15,000,000 dollars. Now we are seeking to borrow another 100,000,000 dollars.
When we look at the Statement of Loans in Appendix K we see countries like Burma borrowing about 33,000,000 dollars, Chile borrowing 112,000,000 dollars, Columbia borrowing 200,000,000 dollars, and also countries such as Ethiopia and Thailand. They are the countries that we expected to borrow from this bank when Labour introduced its legislation in this Parliament about thirteen or fourteen years ago. In addition to those borrowings - I mention this only to give a clear picture - this Government has borrowed £A526,000,000 from countries such as the United Kingdom, Canada, the United States of America, Switzerland and the Netherlands. The interest on those borrowings outside the World Bank is £30,000,000. Three borrowings have been made, one of 20,000,000 dollars by a Labour government - the only borrowing by a Labour government since the end of the war- and two others of 30,000,000 dollars and 100,000,000 dollars from the International Monetary Fund.
As honorable senators are aware, the International Monetary Fund is a different organization from the bank. It lends money at low interest rates for very short terms and for specific purposes such as to meet balance of payments difficulties or problems arising from fire, flood, famine and similar disasters which strike various countries from time to time. For a time we were the largest borrower from the bank, but now we have dropped into second place. Reference to the list contained in Appendix K indicates that we are the only country in out position which is borrowing from the bank. Obviously you cannot have your cake and eat it too. If we take a large slice of the cake not much remains for those countries which really need something to eat.
– But is not the question of whether the bank will lend primarily one for decision by the board of the bank?
– I shall come to that aspect in a moment if the honorable senator will possess his soul in patience.
– There is another body called the International Development Association.
– I shall come to that aspect too before the night is out. As Senator Wright has stated, you certainly cannot go and help yourself to the funds, but he believes that it is legally in order to borrow, because by joining the bank we became eligible to borrow from it. Senator Wright and I seem to be viewing the matter from different angles, he from the legal aspect and I from the aspect of principle and spirit. Obviously, the spirit of the thing was that we would be one of the countries contributing to the bank’s funds, not borrowing from it. The action of the Australian Government, more than the action of any other government in the world, has reduced the bank to the stage at which it is nothing more or less than an ordinary lending authority. Senator Wright seems to appreciate this fact by his statement that a loan must be approved by the board. The Australian Government has forced other countries to try to achieve by other means the purpose which the bank had in mind so many years ago.
The International Finance Corporation which was set up in 19S5 was designed specifically to help private enterprise. It operates in this way: If a group of companies goes into an area to commence a developmental project the corporation supplies some of the capital. In other words, it becomes a partner in the venture. When the project gets on its feet and begins to pay a profit the corporation sells its assets to any private enterprise company which carss to buy. That was not the objective aimed at when the original bank was established. The International Finance Corporation is following on the heels of private enterprise, and private enterprise does not interest itself in projects for fun. Its concern is to make money, not to worry about starving people. It is true that some good flows from any developmental project. Money is not spent on development if some good will not flow from it. Nevertheless, private enterprise will not interest itself in any project which does not have prospects of success. By its action in selling out its assets to private interests, the International Finance Corporation seems to be working solely for the big financial groups. It encourages them to go into various areas in which normally they would not interest themselves. But that is merely a thought in passing although it must have been within the knowledge of the Parliament when it agreed to join the corporation. At least that seems to have been the intention when the bill was introduced some time before I came to this place.
As late as last year the International Development Association was set up. Clearly, this association was established to do the job which the World Bank has failed to do. In other words, it will look after those people who cannot look after themselves. The first annual report of the International Development Association indicates that its aim is to promote economic development and increase productivity and thus raise the standards of living in the lesser developed areas of the world. It is an affiliate of the International Bank for Reconstruction and Development. Will any honorable senator deny that when we signed the agreement the precise intention was to do the kind of thing mentioned by the association, namely, to promote the economic development of backward countries? The association provides capital on more liberal terms of repayment and is ready to help a wider range of projects than is the bank. Clearly, the Australian Government has been prevented from acting in the association in the way it has been acting in the International Bank because the association is made up of two groups. One group is comprised of lenders to the organization who can borrow, not for themselves but only for some of their dependent nations. I hope that the Treasurer (Mr. Harold Holt) does not wake up to this because I have a fair idea where the next loan for New Guinea will come from if the Government runs true to form. The other group to which I have referred invests a much smaller amount of money with the organization and is eligible to become a borrower. I believe that the Australian Government has been responsible for this state of affairs by not abiding by the spirit of the articles of the International Bank for Reconstruction and Development.
It does one’s heart good to see what has been done already. Let me mention some of the projects which the association has financed to date and then let any one argue that we should not help it. Honduras received a credit of 9,000,000 dollars for work to be done on highways. The proposed new road should stimulate production on existing farms and open new land to settlement, lt will also provide the first direct link between Puerto Cortes on the Caribbean in the north with El Salvador and Guatemala in the south, and should thus greatly reduce transport costs between the rapidly developing north-western region of Honduras and the other two countries, contributing to the economic integration of all three. Sudan received a credit of 13,000,000 dollars for agriculture. The water to be stored by the proposed dam, which will cross the Blue Nile at a point about 66 miles downstream from the Ethiopian border, will more than double supplies available for irrigation during periods of seasonal shortage. It will make it possible to bring nearly 900,000 acres under irrigation for the first time, and also greatly to increase yields and diversify crop production in other areas where water supplies are at present inadequate.
Chile received a credit of 19,000,000 dollars for highways. Existing dirt roads in southern Chile become impassable during the five-month rainy season each year, and the damage caused there by the earthquakes of May, 1960, has been only partially repaired. With the help of the credit, about 600 miles of road will be newly built or relocated and 1,600 miles of existing roads will be improved, providing an integrated all-weather road system connecting the main producing areas with consumption and processing centres. India received a credit of 60,000,000 dollars for highways.
– But we are subscribing to that bank.
– I agree.
– Then what is your point? What has all this to do with the Snowy Mountains scheme?
– According to the debates of the day, it was clear that the then
Australian Government when it joined the International Bank thought that it would become one of the main lenders to the bank and that the borrowers would not be wealthy countries like Australia but countries such as those which I have mentioned. My claim is that the Australian Government has destroyed the spirit of the bank by overborrowing from it. That is my point about it. The International Development Association would never have been set up-
– It has been set up.
– It was set up because of the Government’s action of breaking down the charter of the International Bank by borrowing in the way it has done.
– Where are you getting to? Even if you are right - and you are wrong - there is another organization that we are supporting.
– I do not know how much clearer I have to be to make you understand.
– You will have to be a lot clearer than you have been so far.
– It was set up because the bank was failing to do these very things. The reason it was failing to do these things was because the Government went completely outside the spirit of the charter. Every shilling that the Australian Government takes from the International Bank for projects such as this has to be provided by other countries that support the bank. I know very well that the Government is supporting the International Development Association; it can do very little else. I merely make the point, Mr. Deputy President, that the borrowings from the International Bank have been completely wrong. The Government should never have used that fund to finance this scheme. Evidently there has been a change in the system of borrowing, and I hope that the Minister will give the Senate some explanation of this.
The previous borrowings from the bank were, as far as I can see, something in the nature of a normal overdraft. We have1 asked the bank for money for a specific time. As long as we produced payment for the goods we bought overseas, or produced evidence of intention to pay within the ambit of the loan, no matter where we bought the goods, the bank met the credit. I understand it was termed a basket loan. Now the arrangement has to be specific. We have to ask the bank not only for money for the Snowy Mountains scheme, but for a specific object connected with the scheme. It comes to the point that Senator Wright raised a few moments ago when he said that it is a matter for the directors of the bank. The bank sent experts to Australia to check the credit worthiness of this Government; to see whether money ought to be loaned for this purpose. I do not know how the Government feels about that but as Australians we used to be very touchy about people coming from other countries to check our credit worthiness. 1 wish to quote from a speech by Mr. Bury, the Minister assisting the Treasurer. He dealt with this subject and castigated some Labour speakers. He seemed to be denying the proposition that this loan was being made specifically for the object stated in the bill. To be fair I will quote his words from page 1572 of the daily “Hansard”. Mr. Bury said -
The basic purpose of this loan is essentially simple. It was very well brought out by the honorable member for Bruce (Mr. Snedden) who said that the loan would provide the Australian economy with a fresh capital infusion for development, equivalent to about £44,000,000. This loan has been related to the Snowy Mountains scheme, because, for some years, the International Bank has refused to lend, as it lent earlier, for general development, and has stipulated that its loan shall be only for specific projects. This loan has been related to the Snowy Mountains scheme because it is a large scheme which is under the control of the Commonwealth. For the most part, the big public works which it is necessary to finance by borrowing are run by the States. This one is run by the Commonwealth which enables a great simplification in the process of borrowing.
Here are the words that I would like to be noted and explained -
It would be quite a mistake to confuse a means of getting additional capital for the more rapid development of Australia with the specific project on to which the loan is tacked.
That leaves us a little bit up in the air. We do not know really whether we are borrowing this money for the Snowy Mountains scheme, or whether we are using the Snowy Mountains scheme as a sort of collateral so that we can get a quick quid.
There seems to be some divergence of opinion between Mr. Bury and the Treasurer. I am sure there is a simple explanation, and I am sure that Senator Paltridge will explain the matter when he replies to this debate.
Why does the Labour Party oppose this bill? lt is certainly not to hinder the Snowy Mountains scheme because, after all we were the founders of the scheme. We want to see it put into production as quickly as possible. As much as this may upset Senator Spooner, the Labour Party believes that the Government is abusing the spirit of the International Bank by borrowing this money. There is no need for this loan; the money could be obtained from within the country. The Labour Party thinks it is morally wrong for a wealthy country such as Australia to borrow money from the International Bank, thus leaving that much less for needy countries. Senator Spooner said that we support the International Development Association, but it must be remembered that that organization was set up only last year. Ever since 1950 we have been draining money from the International Bank and keeping that money from other countries.
It is all very well to say that the bank has made other loans. If the honorable senators refer to the report of the bank they will see that it has lent about £700,000,000. But that money has had to be divided amongst about 2,000,000,000 people. It has been provided not to give them luxuries but to give them food, or the means to produce food, as I mentioned earlier.
Money is not the all important matter. It is only one of the tools that are being used in the Snowy Mountains scheme. The total cost of the Murray section of the scheme is £92,000,000. We are not borrowing, as it were, the full tool; we are borrowing only half of it. I wonder why we are not borrowing the whole £92,000,000. If we are deficient in part of this money, we ought to be deficient in the whole of it.
I should like to quote briefly from an address by Mr. Robert L. Garner, president of the International Finance Corporation. He deals in general with this point of bor-, rowing money as. follows -
The wide ‘ acceptance ‘ of the assumption that lack of development is primarily due to shortage of capital has led the United States and other richer countries to provide billions in loans and grants. Over the post-war period immense sums have been made available to the developing areas. Some of these funds have been well applied and have produced sound results, others have not. However, to most of the recipient countries the amounts are never sufficient. In my opinion they never can be, because money alone accomplishes nothing.
Mr. Garner is the head of a big private enterprise organization. He continues -
It is only a tool, and what it produces depends not on how much, but on how it is used. If it is applied to uneconomic purposes, or if good projects are poorly planned and executed, the results will be minus, not plus. The effective spending of large funds requires experience, competence, honesty and organization. Lacking any of these factors, large injections of capital into developing countries can cause more harm than good. The test of how much additional capital is required for development is how much a country can effectively apply within any given period, not how much others are willing to supply.
It is true that Mr. Garner is dealing with
Under-developed countries. I merely mention this statement in order to ask the Minister the following question: - Does he feel that the Snowy Mountains Authority lacks any of those things that are mentioned by Mr. Garner? Does he think it lacks experience, competence, honesty and organization? The only thing we are talking about now is money, but money, as Mr. Garner says, is not the all-important thing. Another thing that is needed is manpower. We have that in Australia. We have the capital equipment in Australia with some possible exceptions. Not being an engineer, I make the proviso that there might be some capital goods that we have to purchase from overseas, but I suggest, Mr. Deputy President, that if that were so our balance of payments would be more than adequate to meet that requirement. I noticed a few days ago that an amount of £78,000,000 was repaid to the International Monetary Fund without ever being drawn. I know full well that it was not contemplated that the International Monetary Fund should be used for things like this, but to overcome deficiencies in a country’s balance of payments, distress caused by flood and that type of thing. We had this money available. If the Government had been worried about the effect upon the balance of payments position of the development of the Snowy Mountain scheme it would have held on to this money. It may not have been wise to do so; I am not dogmatic about that. But if the balance of payments position had been worrying the Government, obviously it would not have repaid £78,000,000 a short time ago.
We have heard some comment about rates of interest. It has been pointed out that on other occasions a rate of 4 per cent, has been charged. Most of those expenditures were made out of revenue and only a book entry was required. It was a little akin to the new magic that the Government has produced in financing the Post Office, whereby a set rate of interest is charged. I suppose the value of the procedure in the case of the Snowy River scheme is that it will be possible to compute the cost of electricity produced and compare it with the cost of production of thermal stations.
We oppose the bill, first, because we believe that the bank should not be used for this purpose. We believe that it is morally wrong to use the bank for our purposes when clearly we were meant to lend to the bank and not to borrow from it. We are borrowing in Australian currency, which could have been made available for other developmental projects throughout the world, among which are the Mekong River project in Viet Nam and the Indus waters project in Pakistan and India. These require capital and they are only in their initial stages. Surely it would have been better to direct this money into those channels, allowing those countries to borrow in Australian currency, helping us to find the goods that they need and that we do not need in our capital structure. I do not suppose that there is a man or lady in this place who has not from time to time had manufacturers or exporters in his or her office, saying how they had jus: missed contacts overseas, sometimes because of lack of credit facilities in Australia, but more often because of high cost of production. The Government has not got round forcefully to assisting people to export How much better it would have been if we had been able to give these credit facilities to other countries so that they could help Australia by buying from us. I am wondering who is right. It seems to me that this procedure is being used as a means of getting extra money for the general development of Australia, merely using the Snowy Mountains scheme, as Mr.
Bury said, as a convenient project, which captures the imagination of any one who has made a study of it.
Senator Spooner seems to think that I am off the ball when I criticize borrowing from this bank. It is of no use to pay lip service to the helping of under-developed countries, which was the express purpose for which the bank was established. From a reading’ of the debates of the day, there can be no doubt about that. The purpose was so dramatic in those days. Most of us remember developments at the time when we entered the world financial organizations. If we continue to pull a three-card trick on the under-developed countries, what is our position in the bank structure? We are giving money to the haves - we are amongst them, to my way of thinking - and taking it from the have-nots. It is nol of much use to talk about the depredations of communism when we do that sort of thing.
In relation to the International Development Association, there is a definite legislative enactment preventing Australia from borrowing in an area where it should never be. I do not know how the Government can justify what is about the only stable country in the world borrowing from the bank at a time when the under-developed countries are calling out for capital, when they are getting only a meagre amount from the bank and there is not enough to go round. We oppose the measure because it is completely and morally wrong to be moving into this sphere. It is unessential for us to borrow in this area. Until now we have managed to finance the Snowy Mountains scheme from internal sources. We have all of the other ingredients that we need.
– From what source would you supply these funds, if not from the bank? Your leader has always advocated that they should not come out of revenue.
– They should be found internally, letting future generations pay their share.
The ACTING DEPUTY PRESIDENT (Senator MCKELLAR).- Order!
– It seems strange that suddenly, after spending £180,200,000 on the Snowy Mountains scheme, without having to go to the bank, this course should become a sacred cow of the Liberal Party. Senator Wright is never very forceful when supporting his own Government. He is much better when he is opposing it. That is why he is in such weak form to-night in his effort to bolster the Government’s action. Having financed the Snowy Mountains scheme from moneys raised within Australia, we should continue to do so. There is no need for us to go to the bank. It is morally wrong to do so. We are proposing to borrow for purposes that were never envisaged by the bank in the first place. The Government hides behind the cloak that the course must be all right because representatives came out and checked over the Government - that was insulting, in itself - to see whether the Government’s credit worthiness was such as to justify a loan. At one time there were basket loans for other countries. Suddenly we are put in the same basket as these other nations.
That is why we oppose the bill.- It is completely wrong to be borrowing from the bank. In spite of what Senator Wright says, money could have been obtained from the source from which it has been obtained over the years. Revenue has been used for the purpose from time to time. I have no doubt that if this measure meets with unpopularity among the general public the Liberal Party will go back to-morrow to the old method, because from time to time it is most sensitive to what the press says. We say that this is not in line with good international diplomacy. The Government is taking away from the have-nots to help the haves. For these reasons, the Opposition intends to vote against the bill, not in any desire to hold up the development of the Snowy Mountains scheme, which was started by a Labour government and adopted very late in life by the Liberal Party. ,
– “ Not in any desire to hold up the Snowy Mountains scheme “ - I have heard that statement too often. I have been Minister in charge of this scheme for eleven years. Throughout the whole of that period I have most consistently adopted the policy that this was the greatest undertaking to which Australia had put its hand and that we could succeed as Australians - not as Liberals or as members of the Australian Labour Party - only if we had the whole of Australia behind this effort. There has never been a function in the history of the Snowy Mountains scheme at which we have taken a party political line. Yet, on this occasion I have had to suffer what I have had to suffer previously. I have been obliged to listen to a representative of the Labour Party accusing the Government of opposing the scheme. He has referred to the opening ceremony and has taken every opportunity to try to make party political capital for the Labour Party at the expense of the Government.
Let us recall the facts concerning the 1949 opening ceremony. If my information is correct, the ceremony was brought forward almost on election day. There was such a great hurry to get on with the scheme that the opening ceremony - the firing of the first shot - took place some two miles from the correct site. There was such tremendous anxiety on the part of the Chifley Government to cash in on this scheme at election time that that is the way in which the opening ceremony was handled. Do you wonder, Sir, that in the circumstances there was no great enthusiasm by the Government parties to go along to a blatantly party political opening ceremony on election eve?
– Be fair. I have been fair to you through the years, Senator.
– Do you think the speech we have just listened to was a fair speech?
– It was not concerned with the Snowy Mountains scheme at all.
– It was a case of Labour Party versus Liberal Party. It was to the effect that the Labour Party is entitled to the whole of the credit for the Snowy Mountains scheme and that the Liberal Party is a hanger-on and is cashing in on the work of the Labour Party. I have had to handle this scheme. Let me recount the circumstances under which I inherited it.
The Labour Party, when in office, had the same legal advisers as we had. The Labour Government must have been advised, as we were advised, of the lack of constitutional power by the Commonwealth to carry out the scheme. It must have been advised that it was necessary to have an agreement with the States of New South Wales and Victoria, and for the Commonwealth Government’s powers to be underpinned. When I took over the administration of the scheme, nothing whatever had been done to obtain the consent of the States to such an agreement. I am now speaking of the contribution of the Labour Party to the Snowy Mountains scheme, and that is a relevant point, because the Labour Party, in its opposition to this bill, is playing party politics as it has played party politics all along.
– We are not opposed to this bill from the point of view of financing the Snowy Mountains scheme.
The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order!
– Why does not the Opposition listen to the Leader of the Government as we listen to the Leader of the Opposition?
– Order! There is too much interruption.
– Let me return to the circumstances in which the agreement was reached and to the contribution of the Labour Party to the Snowy Mountains scheme.
For six and a half years I had to negotiate with the Labour Governments of New South Wales and Victoria before I could obtain a constitutional foundation for the scheme. It was not until the Labour Party was thrown out of office in Victoria and was replaced by a Liberal Government that we reached finality with our negotiations. I am stating points which are so clearly in my mind that honorable senators may take them as being accurate. Had there not been a change of government in Victoria-
– You are not being very charitable.
– I am being far more charitable than Senator Willesee was, with his snide attack on the Government. I am at least speaking straight from the shoulder. I say that there would not have been a constitutional basis for the Snowy Mountains scheme had the Labour Party not been thrown out of office in Victoria and replaced by a Liberal Government. The Snowy Mountains scheme owes its constitutional foundation and its legal entity not to the Labour Party but to the Liberal and Country Party Government in the Federal sphere and to the Liberal and Country Party Government in Victoria. It took me six and a half years of fighting the Labour Party before I succeeded. I would not have succeeded had not the Labour Party Government of Victoria been replaced by a Liberal Party Government.
Let me refer to another of the so-called great contributions made by the Labour Party to the success of the Snowy Mountains scheme. The Labour Government of New South Wales entered into a legal obligation to build the Blowering Dam. That government has never honored its obligation, with the result that at the present time, since the opening of the T.2 power station, some 600,000 precious acre feet of water are being wasted each year. That is so because the Blowering Dam has not been built to provide the regulating storage.
Senator Willesee referred to figures. We have put into this scheme about £190,000,000. No government has called on the resources of the Australian people to a greater extent than has this Government for the purpose of building the Snowy Mountains scheme. No Opposition has been so ungenerous as is the present Opposition in this Parliament in its attitude towards the efforts of the Government, an attitude exemplified in Senator Willesee’s speech to-night. Despite the fact that we have had a political setback, that is one of the reasons why we shall stay in government for a long while to come. There is a lack of sportsmanship on the part of the Labour Party. It lacks that inate sense of decency which should prompt it to give credit where credit is due. Fancy, in the circumstances I have mentioned, Senator Willesee standing up and saying, “ We are supporting the Snowy Mountains scheme, but we are against the principle involved in this bill.” What nonsense! All that honorable senators opposite are aiming to do is to win political points wherever they can. I say to them, “You cannot get away with it. The Australian nation is an intelligent nation. You cannot hold bogus opening ceremonies on election eve; you cannot oppose the completion of the agreement upon which the scheme is founded; you cannot welsh on your legal obligation to build the Blowering Dam; you cannot oppose the obtaining of finance for the scheme; you cannot do all those things and then say that you are supporting the Snowy Mountains scheme.” It is good to know where we stand. I have put the position, so far as the Opposition is concerned, in simple terms. I think I can honestly say that this is the first occasion on which I have said a harsh word concerning the Snowy Mountains scheme. When I listened to Senator Willesee’s speech I reached the point of no return. The Opposition cannot have it both ways. If honorable senators opposite vote against the proposal to raise money for the scheme they stand convicted as opponents of the scheme, which, deep in their hearts, they are, because they are sorry that this Government has made such a success of the scheme.
Those few remarks were a bit impromptu. However, it does me good to reply to some of the remarks made by honorable senators opposite.
– You are making this up as you go along.
– And I will read it to-morrow in “ Hansard “. You, too, will read it in “ Hansard “, and there will not be one incorrect statement in what I have said. This is a subject about which I have an intimate knowledge. The facts I am not likely to forget. What is the Labour Party’s alleged opposition to this legislation? Its real purpose, of course, is to try to obtain credit both ways. It wishes to pretend that it is a great supporter of the Snowy Mountains scheme and at the same time its seeks to criticize the Government. Let us examine the Labour Party’s stated opposition to this legislation. I tried to follow Senator Willesee’s flights of fancy. I could not quite understand the logic of his remarks. As I understood him, he said that the Government was to be condemned for borrowing at all from the world bank, but in almost the next breath he asked why we were borrowing only half the money from the world bank. He said that if the Government were efficient it would borrow all of the money from the world bank.
– I never said that.
– If Senator Willesee reads his speech in “ Hansard “ to-morrow I will be surprised if he did not say what I allege that he said. I made a note at the time-
– In shorthand?
– I made a note that I can read. 1 cannot read my own shorthand. What is the Labour Party’s real opposition to this legislation? I brush aside its sudden quixotic concern for the world bank. The world bank is a great organization. We are shareholders in the world bank. We are proprietors of the bank. We are borrowing from the bank with a consciousness that it in turn is borrowing on the world money markets for the purpose of lending to us and to other countries. The world bank is an institution of very great prestige and standing. It is an institution that can borrow in circumstances in which others may not succeed. The Labour Party, if I judge its motives correctly, is not concerned about the Government borrowing from the world bank. It is quixotically saying that we should not borrow from the world bank but should leave the way clear to others. That, with respect, as somebody behind me points out by way of interjection, is a matter for the directors of the world bank. Those directors come from all countries. They represent all countries that are components of the world bank. It is for those people to judge the correct attitude and policy for the world bank to observe. The world bank has made money available to us.
I do not accept the proposition that Senator Willesee’s attack was made because this transaction is a particular transaction with the world bank. His attack was made because of the misguided view- obsession I believe it almost to be - of the Labour Party about overseas capital coming into Australia. That is Labour’s deep-rooted objection. We had some extraordinary meanderings on the part of Senator Willesee. As I remember his speech, one of his suggested solutions for this problem was that instead of borrowing from the world bank we should take the £78,000,000 that we got from the International Monetary Fund and invest it in the Snowy Mountains scheme.
– I never said any such thing, and you know it.
- Senator Paltridge made an interjection which indicated that he placed the same construction on Senator Willesee’s remark as I placed on it. If we both are wrong, I can at least say that I am wrong in good company. Perhaps we may be pardoned if we are wrong. But I very clearly heard a most extraordinary proposition come from Senator Willesee - a proposition that we should take money from the International Monetary Fund - a fund created for the specific purpose of providing short-term loans to remedy balance-of-payments problems - and invest it in a long-term proposal such as the Snowy Mountains scheme. That is the type of confused proposition that I understand Senator Willesee to advance. It is just as confused as the Labour Party’s philosophy about borrowing money from overseas.
One of the most interesting sets of figures that I have seen about overseas borrowings was that given by Mr. Bury in another place when speaking on this bill. He pointed out that despite Labour’s criticisms, our position with regard to overseas borrowings is less involved to-day than it was when the Labour Party was last in power. I thought the figures were very interesting. They show that in 1949 interest on overseas loans amounted to .9 per cent, of our national income. To-day that same interest amounts to only .5 per cent, of our national income. The overseas proportion of total Commonwealth and State debts was 26 per cent, in 1949. In 1961, it amounted to 12 per cent. Australia’s overseas debt prior to the last war was £87 lis. per head of population. The figure is now £67 3s. 9d. I refer to those figures because they show that the Labour Party is not thinking sufficiently progressively to cope with the progress that has taken place in Australia in the twelve years that it has been out of government. Members of the Opposition have this theme song: We must not pledge our assets; we must not borrow overseas. Yet the policy that this Government has adopted has resulted in our overseas liabilities being comparatively less than they were twelve years ago, as a result of the growth and development that have occurred.
– Be fair.
– If you would like to make a speech, I will sit down and give you the floor. Then I will make my speech when you have finished.
– It is all right. Go on. I just said, “ Be fair “.
– Order! Senator Dittmer, you are interjecting far too much.
– It was Senator Spooner-
– Order! I warn you, Senator Dittmer.
– I do not mind who makes the speech. I am prepared to toss to decide who makes the speech, but one of us has to make it. I should like to make another point in reply to Senator Willesee. This is just a case of clear misunderstanding on his part. The mission that came to Australia from the International Bank was not here to inquire into the credit-worthiness of the Australian Government. That was not the point at all. The policy of the bank is to make advances only on economic propositions. It will not make advances unless it believes that the proposition is economically sound. So the International Bank sent its technical men to Australia not to look at Australia’s credit standing, as Senator Willesee said, but to look at the economics of the Snowy Mountains scheme.
The report that they made has not been made a public document because it belongs to the bank itself. However, it is a great tribute to the scheme as a whole that the report not only says that the scheme is economically sound but aiso goes out of its way to pay a tribute to the management of the scheme and the way it has been controlled by the Snowy Mountains Authority. I should like to turn to some other aspects. I hope that I have dealt with Senator Willesee’s criticism. Perhaps I have not dealt with all of it, but I have dealt with a good deal of it.
I should like to give a little progress report because in many ways this is almost the half-way mark in the history of the scheme, with the completion of the diversion of the waters of the Mumimbidgee River and the commencement of the diversion of the waters of the Murray River. The T.2 power station will be officially opened at the end of this week. With the opening of that station, the revenue from the sale of power will increase from its present level of £1,500,000 per annum to £6,500,000 per annum. We shall start to” receive a return on the money that we have invested. The coming into operation of T.2 means that the 660,000-kilowatt generating capacity is almost 20 per cent, of next winter’s expected total demand on the interconnected New South Wales and Victorian electricity systems. It is a very great contribution to the total electricity requirements of those two States.
– That is 20 per cent, of the highest winter demand, is it?
– It is almost 20 per cent, of next winter’s expected demand. We are in that situation as a result of the speedy completion of the contracts upon which we have entered. Honorable senators will remember that the Adaminaby dam was finished about twelve months ahead of the contract time. The T.2 station has been finished months ahead of schedule. As a result of that speedy completion of work, we now have 1,600,000 acre feet of water in storage. In more understandable terms, that 1,600,000 acre feet of water is sufficient to provide 2,600,000,000 kilowatt-hours of power. In even simpler terms, that huge amount of power is approximately 30 per cent, of the total electricity used in New South Wales last year. When T.2 comes into operation, it will put into the grids approximately 20 per cent, of the total power used in New South Wales and Victoria. Then we have in reserve water which would be sufficient to provide 30 per cent, of the electricity used in New South Wales last year.
– Is that the expected highest?
– No, that is the present position. If things went well, if we had big rainfalls and big snowfalls, we could build up a water supply greater than that, but the practical question would then arise of what New South Wales and Victoria would ask of the scheme in terms of power being put into the grids. I can say, however, that 1,600,000 acre feet is by no means the total available storage under the scheme.
The scheme has been able to produce power at a little less than Id. a kilowatthour. By all standards, that is acknowledged to be cheap power. We must remember that the power is being supplied at a 25 per cent, load factor. I hesitate to embark upon an explanation of that; but there is a very big difference between supplying power 24 hours a day and supplying it for six hours a day. Power supplied for six hours a day at Id. a kilowatt-hour is cheap power by all standards. 1 go back to refer to the great weakness in the scheme. I spoke of it more heatedly in an earlier part of my speech, but now I will go back and traverse it more dispassionately. I am referring to the fact that the Blowering dam has not been completed. I will try to illustrate what that means. When T.2 comes into operation, 500,000 acre feet of water will be sent down the Mumimbidgee River. That 500,000 acre feet of water goes down mainly in the winter time when it is required for power purposes. If we had the regulating storage at Blowering we would have 1,100,000 acre feet of water available for the Murrumbidgee, instead of 500,000 acre feet as at present. Because we have not got the storage at Blowering, Australia is losing not less than 600,000 acre feet of water in the Murrumbidgee Irrigation Area of New South Wales. Let me take the matter a stage further. The 500,000 acre feet of water at T.2 is the equivalent of 320,000 acre feet of water in the irrigation area because of losses through evaporation and seepage. The additional 600,000 acre feet that we are losing because of the lack of storage would give us another 380,000 acre feet of water, so that if we had the Blowering dam in operation we would be able at this stage to supply 1,100,000 acre feet of water at T.2 power station which is the equivalent, after losses, of 600,000 acre feet at Leeton, Griffith or any other centre in the Murrumbidgee Irrigation Area.
I thought the Senate might be interested to know that the usage on the Murrumbidgee Irrigation Area varies from season to season. From 1953 to 1960 the usage varied from 244,000 acre feet to 572,000 acre feet a year, the average being 410,000 acre feet. So that T.2 in operation, plus the Blowering dam, will yield much more water - 600,000 acre feet as compared with 410,000 acre feet as at present. The lack of the Blowering dam is costing Australia 380,000 acre feet of water on the irrigation area farms. I see Senator Mattner, a South Australian, nodding his head. Think what you could do with another 380,000 acre feet of water in South Australia. That is the extent of the national los3. I also had other figures taken out which are interesting to me. The total water used on farms in New South Wales was 1,585,000 acre feet and in Victoria 1,528,000 acre feet. Figures like that put the Snowy Mountains scheme in perspective. You put it in perspective when you realize that the irrigation areas of New South Wales and” Victoria at present use 1,500,000 acre feet of water each year and that the Snowy Mountains scheme could now provide, if the Blowering dam were completed, 600,000 acre feet by comparison with a total usage in either New South Wales or Victoria of 1,500,000 acre feet.
– When will the dam be completed?
– I noticed that the Premier in his last policy speech stated that his Government would make a start on the Blowering dam during the life of this Parliament.
– Was there a specified time under the agreement?
– I cannot stats whether there was a specified time, but the spirit and the purpose of the agreement was that the Blowering dam would be completed to coincide with the completion of the diversion from the Eucumbene to the Murrumbidgee.
That is all I have to say on this subject. I do not believe that the Labour Party is entitled to state that it is opposing the bill and supporting the Snowy Mountains scheme because when the Labour Party opposes obtaining the sinews of war for the Snowy Mountains scheme it opposes the Snowy Mountains scheme itself.
.- The Leader of the Government (Senator Spooner) has adopted a very peculiar attitude in this debate. Senator Willesee in his speech stated the Opposition’s viewpoint in relation to the method of financing the Snowy Mountains scheme. No one on this side of the chamber has ever attacked the Snowy Mountains scheme. The Minister joined issue with us about the scheme’s creation. He spoke about the six years of negotiations. To me that showed a complete lack of courage in failing to use the powers that already existed in the Constitution to deal with this matter. The Minister was incorrect when he said that the Snowy Mountains Authority had no legal status until the States agreed to participate in the scheme. In the first place, the Commonwealth Government has the responsibility to supply power for defence purposes. The Commonwealth Government has the responsibility to supply power for the Australian Capital Territory, and the Commonwealth Government has the right to trade interstate in electricity and water supplies. Therefore, for the Minister to say that the authority had no legal status was stretching the point much further than he need have stretched it. I join issue with him on that aspect.
During his speech Senator Willesee did not use one word in attack on the Snowy Mountains scheme, but the whole theme of Senator Spooner’s speech was that the Opposition was attacking the scheme.
– In that case will you vote for the bill?
– I shall develop my argument in my own way. Let me say, however, that I shall vote against the bill because the Minister stated in his secondreading speech that the terms on which the International Bank has agreed to make the loan available are similar to those on which other bank loans currently are being made, and that representatives of the International Bank will make an inspection to see whether the funds are being spent properly. Over the past ten years we have spent £181,000,000 on this scheme, running it ourselves. We did not need people coming to this country to make inspections. It is like their confounded cheek to come to Australia to inspect our projects simply because they have made money available to us for a period of years at 5f per cent, interest. Senator Scott seems to be interjecting. Let me tell him that in twenty years at 5i per cent, simple interest we shall pay double the amount of the loan.
This money quite easily could have been raised internally even though in the past we have criticized the Government’s method of financing the project out of Consolidated Revenue because the £181,000,000 has come from the taxpayers of this country. However, the scheme now is being sabotaged by the Government borrowing money at this high rate of interest. In 1950, the interest rate on our borrowing was £3 2s. 6d. That was extortionate because the money was being raised from Consolidated Revenue. In 1960 we raised £18,000,000 at 5 per cent, interest. A charge of 5 per cent, on the Snowy Mountains scheme! In 1961, £18,500,000 was borrowed at £5 7s. 6d. per cent, per annum. We are handing on to future generations compounding interest charges on this project which will cost double the original estimate.
– What rate of interest did the Labour Party charge?
– Money could be made available from Consolidated Revenue at the actual handling cost. This great project which is supposed to supply the Australian people with cheap electricity is > being sabotaged. Its purpose is to reduce farming costs by improving the fertility and productivity of the land along the Murrumbidgee and the Murray extending into South Australia. We have great problems facing us in competing in overseas markets, but the Government is deliberately adding a burden to the scheme which every farmer and every consumer of electricity will have to meet. This is fantastic.
The Minister, in his second-reading speech, did not give one feasible reason why we should go overseas to borrow this money. The savings banks of Australia are showing tremendous surpluses. Money is readily available on the market. The recent Commonwealth loan was over-subscribed by £35,000,000. That great monopoly, the Broken Hill Proprietary Company Limited, obtains its money locally and does not have to go to any overseas organization. When that company seeks to raise money locally it meets with an immediate response. So why is the Government continuing this racket of overseas borrowing? Why is it selling its soul and our birthright overseas? Senator Spooner is a past master and an arch architect in this scheme of selling Australia’s future to overseas interests. What 1 am saying applies in every field. Huge sums of overseas capital are coming on to the stock exchange to buy up shareholdings in our industries. It is happening in the oil industry. Every day we read reports in the press of overseas money being invested in the oil industry. We might as well kiss our aluminium industry goodbye as far as any hope of big profits coming back into this country is concerned. Overseas investors have it tied up. The new tin industry in northern Australia is also in the hands of overseas interests. This Government is selling our birthright. This loan is just another straw that may break the economic camel’s back.
Senator Spooner has completely distorted Senator Willesee’s contribution to this debate by saying that the Labour Party is attacking the Snowy Mountains scheme. We are attacking the vicious principle of burdening future generations of Australians with 5J per cent, interest charges.
We are supposed to be lucky to be able to get this money! The loan will be for a period of 25 years, and interest on the outstanding amount of the loan is payable half-yearly at 5i per cent. This includes 1 per cent, commission which is added by the bank to its capital reserves. So we are not only to pay interest but commission on top of that! This is a cumulative cost each year. It is not a matter of simple interest, but of compound interest. We have to borrow money to pay interest in hard currency areas. The Minister tried to justify this by saying -
Although this loan carries interest at the bank’s current lending rate, which in its turn reflects the cost of borrowing by a favoured borrower in the main capital markets of the world, it might be mentioned that the average rate of interest paid on all Australian loans from the International Bank is 4.8 per cent.
The average rate of interest is 4.8 per cent., but as a result of this loan we are burdening the Snowy Mountains scheme with an interest rate of 5i per cent! If the average interest rate is 4.8 per cent., we should be able to obtain something better on such a gilt-edged security as the Snowy Mountains scheme, but even if we could that to my mind would not justify our borrowing overseas.
Here is another concession. The Minister said -
A favourable “ grace period “ has been allowed by the bank, under which repayments do not commence until September, 1966.
The position is, Mr. Deputy President, that we of the Labour Party are deeply interested in the progress of the Snowy Mountains scheme. We believe that anything that we can do to assist its progress and to hasten its eventual completion should be done. In the Snowy Mountains scheme we have a reservoir of natural resources in the form of both water and electricity, lt is a God-given gift inasmuch as we have water at an elevation which, through man’s ingenuity, can be directed through the turbines for man’s benefit. The more water that flows in this way, the richer this country will become. In any private business, if you do not try to salt back a certain proportion of your resources when you are starting off, you will find yourself in trouble in the long run. Instead of salting back into the country every penny we can make out of this great project, we are proposing to add to the burden of future generations. Interest payments should be coming back to be circulated amongst Australian investors. Instead of taking advantage of the economies that could be made by using the money that is available in this country we shall have to pay interest at the rate of 5i per cent, to an overseas banking organization.
I suppose there are different factors involved in this plan. Much of the equipment that is being used on the Snowy Mountains scheme no doubt has to be paid for in dollars. The contractors who have been working on the scheme have been making fantastic profits. I admit that this is because of their know-how, but even so their profits have been enormous. They have broken all previous records. Contracts have been let based on the knowledge of our public works engineers at the time. Times for the completion of contracts have been based on certain norms and the anticipation that certain objectives would be achieved within a certain time. But the contractors have come along with better equipment and better know-how and have cashed in on the contracts. In the main they have been American companies which want their pound of flesh in dollars.
This loan may be a means of providing for payment in dollars for the equipment required and for the huge profits that have been obtained by these contractors. I do not blame them. As long as we can get this scheme going it will not matter. The scheme is magnificent enough to stand all the shortcomings, mistakes and additional burdens that are added on to it. You cannot break this scheme or prevent it from diverting great natural resources to man’s benefit.
Why do we need to borrow from overseas? Why do we need to involve ourselves in the payment of interest when the money could be obtained locally? How are we going to keep our overseas balances up? On the one hand we are striving to export everything we can in order to create a favorable trade balance, and on the other hand we are committing ourselves to an interest payment that will drain away part of the balance we built up. To me that is a crazy approach to finance. It would be different if we were dealing in some essential commodities.
– We are dealing in a commodity.
– We are dealing with water and electricity, which can be produced in Australia. If this money had been needed for something for one of our main industries, such as heavy equipment for the manufacture of steel, components for motor cars, or electrical appliances that we could not produce, the Minister could have written some justification into his second-reading speech. Borrowing overseas at a time when the Government is trying to teach the people the need to conserve overseas balances, while adding an extra burden to the Snowy Mountains scheme, is beyond my comprehension. We have borrowed £530,000,000 overseas since this Government has been in office. The annual interest bill, at a rate of 5 per cent, or more, is a tremendous item.
– How much?
– It is a matter of simple arithmetic. Government supporters make a joke of the fact that we have borrowed £530,000,000 overseas since 1949, yet an amount of £1,783,000,000 was raised within Australia, at a time when £1 had much greater purchasing power, in order to finance the war. To-day, costs are very high; it is costing more and more to complete these projects,’ and we should be doing it with our own currency. Inflation continues internally without rela tion to other currency. Hard currency is costing us 25 per cent. We maintain this exchange, rate to give primary producers an advantage when selling on world markets. That has been the policy of successive governments since the 1930’s. It has given the primary producers a 20 per cent, advantage over secondary producers iri factories perhaps only a few miles away. That is a subsidy that the Australian people pay, justifiably, to the farmer. Here we have the position operating in reverse. We are borrowing hard money at an adverse exchange rate and bringing it here to develop something that we could develop from our own resources. We criticize the Government for over-burdening and sorely pressing the taxpayer of the present generation, making him pay for the Snowy Mountains scheme, while the Treasury imposes an interest rate on money that it gets for nothing. This burden should be distributed down the years among those who follow. In 25 years, most honorable senators will not be as fiery as they are to-day, but they will be watching this scheme come to completion. They will recall the wonderful period of development and the interesting period of history through which they will have lived. I hope that we are alive; but I fear that we may not be as a result of nuclear weapons and the actions of stupid people engaged in international affairs.
Future generations will reap the benefits of this development. The Chowilla dam will be overflowing. Senator Spooner will live to see the Blowering dam. Future generations will recall the years in which this Government impoverished the States by piling on extra tax burdens, getting money from State taxpayers, lending it for the Snowy Mountains scheme, lending also to the States and impoverishing them by charging them interest, reducing their capacity for developmental works. They will remember that for hundreds of thousands of years the Snowy River was running into the sea and that nothing was done to harness it until a Labour government came to power. The few years that will elapse before the Blowering dam is completed will be as a speck of sand on the mountains.
The Snowy Mountains Authority deserves the greatest praise of every person who is interested in the development of natural resources anywhere in the world. It has given a lead in engineering, initiative and courage. Not a nian here will’ criticize the work that has been done. But we have justification for criticizing the Government for not developing the great potential of the scheme and’ for adding unnecessary burdens that will increase the eventual cost of commodities to the consumer. Electricity from the T.2 power station will come into the grid. Some will be used in New South Wales and some in Victoria. Wherever it is used, it will be a national asset. We shall create power where nothing existed before. That is an example of progress and civilization, with man conquering his environment. We shall be pouring wealth into the continent, but at what cost? Senator Spooner mentioned an amount of Id. a kilowatthour. I agree that only Tasmania could do as well or better. There we had natural resources that were exploitable and easily diverted to man’s uses. As the demand for electricity grows, hydro-electric schemes in Tasmania are becoming more difficult. Engineering problems are becoming more complex. The conservation of water and the volume of water becoming available present a problem. Extra costs are increasing the cost of electricity. The great advantage that Tasmania had in encouraging industries to come to our island is being dissipated by increasing costs. Taking account of freight costs, Tasmania is being put on virtually an even footing with other States, whereas previously we had a very tempting bait to offer potential manufacturers and other industrialists.
The same principle is applicable to the Snowy Mountains scheme. As each new power station comes into operation, costs should decrease, because water will be used a second and third time. Because of the weight of the air pressing down on the reservoirs, the atmosphere is an ally in assisting the passage of the water through the turbines. In addition, the number of customers of the power services is increasing. Therefore, costs should be decreasing each time a new generating station is brought into operation.
– You are becoming rather technical now.
– I am telling a simple layman’s story, but it is economically sound.
I come back to our criticism of this bill. It is based on the fact that we are burdening this great scheme with the worst aspect of finance in the Western world to-day, the cancer of interest rates. Interest rates are destructive of a stable and progressive economy. They are the rock on which the Western world will perish. In every Western country we see an increasing inability to compete against Eastern monetary standards. Our long industrial experience, our higher percentage of university-trained people, and our experience in the technical side of industry all should be great assets to us in our efforts to compete on world markets, but because of our costs, of which cumulative interest charges that inflate the basic costs of a commodity are a part, we are finding it more difficult to do so.
We on this side of the chamber could never support such an indefensible proposition as that involved in this loan that we are considering. The Minister for National Development has never given us one word in explanation of why it has been necessary to go to the International Bank for Reconstruction and Development for this money. The figures relating to savings bank accounts show that £44,000,000 would be readily available on the Australian market. In fact, I think that £100,000,000 would be readily available on the Australian market for this purpose. The last Commonwealth loan was oversubscribed.
– Would you pay the people interest?
– Yes. It would be fairer to pay interest to the people of Australia, through the savings banks, than to take money from the taxpayers and charge them £5 17s. 6d. per cent, interest on their own money. If it were necessary to pay, say, 5 per cent, on savings bank investments, that would be a business proposition, even according to the lights of the Government.
I return to the three methods of financing projects of this kind. First, there is the method that the Government has been following during the last ten years. As I have already indicated, in 1950 it was necessary to borrow £2,497,000 at £3 2s. 6d. per cent, interest. In 1951 it was necessary to borrow more than £6,000,000; in 1952, £10,000,000; in 1953, £13,000,000; in 1954, £13,000,000; in 1955, £13,000,000; in 1956, £15,000,000; in 1957 and 1958, £18,000,000; in 1959, £24,000,000; in 1960, £28,000,000-, and last year, £18,000,000. All that money was raised internally, merely at the cost to the Department of the Treasury of raising it, because it came from Consolidated Revenue.
This technique of charging taxpayers for the scheme by taking the money from Consolidated Revenue means that a great burden is being placed on a small section of people during a short period of time, whereas the benefits of this scheme will flow for 100 years at least. Most of the projects covered by the scheme are of a permanent nature. They will last as long as the huge dams and tunnels that are being built. They could be ageless. The Snowy Mountains scheme has given us a great opportunity to make inroads into rock formations that have existed from the beginning of time and to harness water which previously was wasted when it flowed into the sea. There were rock-wall dams in early Egyptian times. The Snowy Mountains scheme is no short-term investment. It will provide rewards for the Australian people for hundreds of years to come. Is it not fair, therefore, that the people who are going to enjoy the benefits of the scheme, over a period of time, should have to pay a share of its cost?
The proposition that we are putting up is that instead of this interest money going overseas, the Australian people should be allowed to finance the scheme, without supervision by representatives of the International Bank, without an obligation to people overseas, and without having to throw our hat into the ring and borrow from this organization. Senator Willesee made the very strong point that we should not be going to the International Bank for a loan, first, because our overseas balances, though they are improving, are not good, and secondly, because there are many countries of the world that are less fortunate than is Australia and which cannot stretch their finances far enough to develop their natural resources without assistance from funds made available by organizations such as the International Bank. So, Mr. Acting Deputy President, there are very strong reasons why we oppose this measure. I say emphatically and categorically that there has been no attack on the scheme.
No such attack was made by Senator Willesee, and I have never heard any honorable senator on this side of the chamber make such an attack. I want to give the lie to Senator Spooner when he implies that we are attacking the Snowy Mountains scheme. The Labour Government inaugurated the scheme. We claim credit for having seen the great potential benefits of the scheme. Had we remained in office, we should perhaps have followed different methods to achieve the objectives of the Snowy Mountains scheme.
– You could not have done it for the same cost.
– We would have done it for much less, for the simple reason that this is a great socialist scheme. It gives my heart great joy to see the Snowy Mountains scheme, but it also causes my heart great pain to see this magnificent enterprise, designed for the benefit of the people, having imposed on it every parasitical, burdensome charge that can be added by this private enterprise Government. The Government wants the scheme to be competitive. This scheme should have been financed at an interest rate of li per cent. - just enough to pay the bank charges.
– To whom would you give the li per cent.?
– You have been taking money from the taxpayer and giving him nothing in return. The taxpayer has been giving money to the Government in advance under pay-as-you-earn taxation and the Government has been lending that money back at interest. If that is not a Shylock-type transaction I do not know one.
– A Labour government introduced pay-as-you-earn taxation.
– Yes, to finance the war effort. Provisional tax was a good way to skim off surplus money when goods were in short supply. During the war everything was rationed. Santa Claus’ shirt-tail even was cut in order to save half a yard of material. Future generations will criticize this Government for imposing interest rates in relation to the Snowy Mountains scheme. The Government may survive for the rest of its present term, but it will not last very long. It and governments like it in other parts of trie Western world show an incapacity to face UP to the problems of modern living. The Government clings to the out-worn and fusty idea that you must charge high interest rates, that you must let in the private enterprise racketeer and the commission agent. I did not think I would ever see the day when a government would have the temerity to borrow money unnecessarily from overseas and to make provision for the payment of 1 per cent, commission. However, all things are possible under this Government.
– Who gets the 1 per cent.?
– The bank.
– Who owns the bank?
– The money goes into the bank’s capital reserve. Many countries, including Australia, will contribute money to this bank. That money forms the bank’s capital reserve. Australia is a nation that honours its word. If we say that we will lend money to the bank, we honour our undertaking. The United States has been generous to the bank but it is not able to lend as much now as it was able to lend hitherto. A bank such as the world bank does not need great reserves. It is like a parliamentary superannuation scheme. If such a scheme gets into the hands of the actuaries there is no limit to the reserves that they want. Look what happens with certain companies. The crusty old fellows, covering up tax evasions, say that they will put a little into kitty. Somebody hears about it, decides that the company is a ripe plum, submits a proposal to the shareholders and another company is taken over. AH the countries of the United Nations would come to the aid of the World Bank if it needed aid. The bank is only a symbol. There is no physical bank. It is a series of books - a method of bookkeeping. The borrowings are transferred from one side of the ledger to the other. That is the International Bank. An agency is only a few clever people.
This legislation will sabotage the Snowy Mountains scheme by burdening it with 5i per cent, interest. The proposal also gets away from the very firm principle that you should, if possible, pay your own way. Savings banks’ surpluses in Australia show that we should not be borrowing money from overseas, particularly in view of the unsatisfactory position of our balance of payments. The Labour Party opposes this bill because it feels that the proposal outlined in it is a bad way of financing the Snowy Mountains scheme. We applaud the scheme. We pledge ourselves to its continuing development and completion. When the Labour Party gets back into power it will initiate many similar schemes that are now condemned by the conservatives as visionary. The Labour Party will prevent our great resources from being placed in the hands of overseas interests. I refer to our aluminium, bauxite, steel and tin industries, that have been taken over by overseas interests. We will try to bring to the dry heart of this country water from the northern areas where rain falls in great quantities. I hope that some day a Labour government will use atomic power to cut a canal from the sea into the centre of Australia. That is not beyond the realms of possibility. Such a thing could change the climate in the centre of this continent. If this Government had any sense of responsibility it would condemn the proposed nuclear tests at Johnston Island and Christmas Island. Those tests will pollute the world’s milk supplies and will cause countless millions of babies to suffer from leukemia. The Government should use money provided by the International Bank to desalinate sea water.
When Australia’s history is written the Labour Party will be given credit for conceiving the Snowy Mountains scheme. This Government will be given a measure of credit for having continued the scheme, but it will be condemned for burdening the scheme with the stupidities of the capitalist system and imposing high interest rates on the scheme by unnecessarily borrowing money from overseas.
– I have just listened to the most amazing speech that has ever been made in this Senate. Senator O’Byrne thinks it is wrong for the Government to borrow money from overseas in order to continue developmental projects such as the Snowy Mountains scheme. He stated that the interest rate of 5i per cent, which will be charged for the loan of 100,000,000 dollars is far in excess of the rate at which the money could have been borrowed in Australia. In his view the interest charged should be at the low rate of about 1 per cent. He holds the view that the Government should obtain its finance internally and that no project should be undertaken unless it can be financed internally. That is what Senator O’Byrne tried to put over the Senate. He says that the Government should skim off all the excess money in Australia so that no private organization can borrow any money; the Government would grab all the money and put it into developmental works in Australia. Members of the Opposition do not say that in so many words, but that is what they mean. How could firms such as the Broken Hill Proprietary Company Limited borrow £20,000,000 or £30,000,000 from the people in Australia if the Government took all the excess money, as the socialists would if they were in power?
In this chamber to-night I have heard two speakers condemn the Snowy Mountains scheme completely. I will not argue the point about who started the scheme. I know very well, as the Minister for National Development (Senator Spooner) said tonight, that the Australian Labour Party started the scheme. I give it credit for that, notwithstanding the fact that at the beginning a shot was fired 2 miles away from the point where it should have been fired. We hear a lot of talk about the Labour Party being able to complete the scheme far more cheaply than this Government. Let us consider this matter. When the scheme was started, the Australian Labour Party intended to do the work with day labour as far as possible. In fact, when the scheme was started, the New South Wales Government had a contract to build the Adaminaby dam. It was doing that work with day labour.
– That Government insisted on day labour.
– Yes. Notwithstanding the fact that this Government endeavoured to get the New South Wales Government to let a contract and that government took several years to do that, when it was done the dam was completed a year before the time by which the New South Wales Government could have completed it and the cost was £2,000,000 less than the amount the New South Wales Government expected to spend in doing the work by day1 labour. Day labour can never complete the scheme satisfactorily. In this chamber to-night we heard Senator O’Byrne make a statement to the effect that the Labour Party could have completed the scheme at a cost far cheaper than that at which this Government can complete it.
– I did not say anything of the sort.
– That is what you have been talking about all along. 1 want to refer to some of the points made by Senator O’Byrne, Mr. President, because I believe they should be contradicted. They are so ridiculous that if the Labour Party got into power, as it very nearly did, it would be calamitous for Australia to have projects developed in the way that Senator O’Byrne has been talking about to-night.
The Opposition says that the Government is selling out Australia’s future. Mr. President, have you ever seen this country being developed as it has been developed over the past ten years of office of this Government? How could the Labour Party develop it? If we can take any notice of what Senator O’Byrne said to-night, the Labour Party would never develop anything. It would be doing everything with day labour; it would pay no interest; and it would get no money. That is a fact. Therefore, we would get no development. The Government is carrying out large v development programmes throughout the length and breadth of Australia. At present the Government proposes to borrow this money from the International Bank. It will do so if this bill is passed by the Senate. I know that the. Labour Party intends to oppose it. The Government proposes to borrow 100,000,000 dollars to be spent on the Snowy Mountains scheme.
– For its development over the period from July, 1961, to June, 1966, or June, 1967. Over that period the loan will amount to £A.44,700,000. The mere fact that the Government is borrowing that money from overseas makes finance available for other developmental projects in Australia to which this Government is contributing.
– Why does not the Government borrow the money in Australia?
– Let us look at some of the projects that are being developed in Australia at present. Any one with any knowledge of finance will readily agree that the Government cannot borrow in Australia all the money that is required for these vast developmental projects. In the last twelve or eighteen months, the Government has agreed to find £20,000,000 for the reconstruction of the Mr Isa-Townsville railway.
– The Government could not get that money from the International Bank, could it?
– I am sorry, Sir.
– That is not true. The Government could have got the money from the International Bank.
– Why did it not get the money? You said that the Government could not get it.
– I did not say that the Government could not get the money. I said that the money could have been borrowed from the International Bank.
– Why did not the Government get it?
– A guarantee from the Queensland Government was required.
– And the Queensland Country-Liberal Party Government was not prepared to give a guarantee.
– Order! If you interject again, Senator Dittmer, I will name you.
– A guarantee from the mining company was also required for portion of the loan. It was considered that the whole of the onus for the repayment of the £20,000,000 loan should not be placed on Mount Isa Mines Limited. So the original idea of getting the money from the International Bank was dropped and the Commonwealth Government said to the Queensland Government, “Of the £30,000,000 that is needed for this reconstruction work-
– It did not. The amount was £20,000,000.
– I am making this speech. I said that the Commonwealth Government said, “Of the £30,000,000 that is required for the reconstruction work . . .” You do not even know your own State.
– I know more about my State than you know about yours.
– The Commonwealth Government said, “Of the £30,000,000 that is required for the reconstruction of this railway from Mount Isa to Townsville- “
– That is not true.
– Order! I name Senator Dittmer.
– Mr. President, I ask Senator Dittmer to stand up and make an explanation.
– 1 am sorry, Sir; but the statement was inaccurate and I was trying to help the honorable senator. If 1 have offended, I apologize. The railway is being reconstructed from Mount Isa to Townsville and Collinsville. Senator Scott mentioned £30,000,000, but the amount of the Commonwealth Government loan was £20,000,000. The Commonwealth Government made no real endeavour to raise the money from the International Bank. Mr. Hiley and Mr. George Fisher went to the United States of America. When they returned to Australia they said that they received no real help. Now Senator Scott is trying to place the blame on his political associates in the Queensland CountryLiberal Party Government. They have denied that they received help from the Commonwealth Government, except for a letter dated 25th October, I think, that the Prime Minister received from the Premier of Queensland. That is the only acknowledgment that the Queensland Government received any help from the Commonwealth. If I have offended, I am sorry. I hope that this explanation will be satisfactory to the Government.
Motion (by Senator Spooner) put -
That Senator Dittmer bc suspended from the sitting of the Senate.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority . . . . 10
Question so resolved in the affirmative. (Senator Dittmer thereupon withdrew from the chamber.)
The Leader of the Opposition in another place (Mr. Calwell), stated during a television interview in Western Australia during the last election campaign that if the Labour Party were elected to office it would dam the rivers in the north of Australia. When one of the persons conducting the interview asked Mr. Calwell what rivers he would dam he replied, “ All the rivers “.
Words Used in Debate.
The PRESIDENT (Senator the Hon. Sir Alister McMullin). - .Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
– During the course of his remarks this evening Senator Spooner attacked my speech and stated that I had advocated that the £78,000,000 which had been returned to the International Monetary Fund by the Government a few weeks ago should have been used instead of borrowing the additional funds which have been the subject of our discussion to-night. I think that I have quoted Senator Spooner’s remarks accurately. I then interjected, “ I said no such thing”. Senator Spooner shouted at me to tell me what the International Monetary Fund was. He pointed out that it was quite a different set up from the International Bank; that it was for specific purposes and so on. Then he told me to read “ Hansard “ if I did not know what I had said. I have before me my “ Hansard “ proof. I have not put pen or pencil to it. I will quote from it so that there will be no suggestion of my having altered “ Hansard “ or anything of that nature. With your permission, Mr. President, I shall make only brief quotations. The first quotation, from the early part of my speech, will indicate that I was fully aware of the nature of the International Monetary Fund. I said -
As honorable senators are aware, the International Monetary Fund is a different organization from the bank. It lends money at low interest rates for very short terms and for specific purposes such as to meet the balance of payments difficulties or problems arising from fire, flood, famine and similar disasters which strike various countries from time to time.
That is what I said when I was giving an explanation of the bank. Then we come to my specific statement. Senator Spooner says that I advocated that the Government should have used the £78,000,000 that it repaid recently, instead of raising the loan we are discussing to-night. These are my words -
If the Government had been worried about the effect upon the balance of payments position of the development of the Snowy Mountains scheme it would have held on to this money. It may not have been wise to do so; I am not dogmatic about that. But if the balance of payments position had been worrying the Government, obviously it would not have repaid £78,000,000 a short time ago.
I suggest, Mr. President, that that clearly shows that I was not dealing with the question of using one lot of money in lieu of the other, but with the question of the balance of payments, and pointing out that any capital equipment that had to be obtained outside our own area could be purchased without upsetting our balance of payments position. I merely mentioned the £78,000,000 to show that the Government was not worried about its balance of payments, otherwise it would not have repaid that £78,000,000. It is perfectly clear. I have quoted those passages in order to put Senator Spooner right.
– I desire to ask you, Mr. President, whether it is possible, when debates become heated, for the person who is occupying the Chair to continue to do so. I consider that what happened to-night was not in the best interests of the Senate. While Senator O’Byrne was speaking there was more interjecting and more banter than when Senator Scott was speaking. It seems to me that what happened was tremendously unfair. I am not saying, Sir, that you acted outside your rights because you just came into the Senate and you immediately warned Senator
Dittmer. However, during the previous three-quarters of an hour, as I think “ Hansard “ will show, there had been much more cross-firing when Senator O’Byrne was speaking than took place when Senator Scott was speaking. We all know that one can hear these debates when outside the chamber. I ask whether it would not be possible in these circumstances for the person who has been in the Chair to continue to control the proceedings so that an unfair episode such as we have witnessed to-night will not happen again.
– I refrain from replying to Senator Kennelly. All I say is that I do not agree with his approach to a matter which has to do with the conduct of the chamber. I do not wish to debate the matter. I wish to reply briefly to Senator Willesee. I listened to him and I will concede that he should know what he said better than I do. I will read the “ Hansard “ report to-morrow. After listening to what Senator Willesee read, I think it is a fair- interpretation to say that Senator Willesee believed there was interchangeability.
– I did not even advocate that, as “ Hansard “ shows. I said, “ It may not be wise to do so “. Those were my words. How could I be advocating interchangeability?
– I repeat that I will read “ Hansard “ carefully. I think that any one could be excused for misunderstanding what Senator Willesee said. I gained the impression that he thought that we could use money borrowed from the International Monetary Fund for the purpose of this loan. I object to the honorable senator saying that I shouted at him.
– You had better be careful in the future.
– The circumstances may well have been that in order to make myself heard I had to raise my voice, but I thought, having regard to the tenor of the debate, that I contained myself rather well.
Question resolved in the affirmative.
Senate adjourned at 10.38 p.m.
Cite as: Australia, Senate, Debates, 1 May 1962, viewed 22 October 2017, <http://historichansard.net/senate/1962/19620501_senate_24_s21/>.