15 August 1962

24th Parliament · 1st Session

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

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Senator COHEN:

– I ask the Minister for Health a question without notice. Has the Minister’s attention been directed to a report in this morning’s “ Age “ referring to an article in the Medical Journal of Australia by the Director of Rheumatology, Dr. M. Kelly, on the use of the drug cortisone? From the article it appears that Dr. Kelly has noted some disastrous results in certain cases he had treated with the drug, and he apparently holds the view that cortisone is a drug with more side effects than all of the other drugs combined. Dr. Kelly is also quoted as saying that cortisone is being freely prescribed by specialists of all kinds who do not know about its ill effects on the body generally; and further that each pharmaceutical firm sells cortisone under a different trade name. In view of public anxiety about the side effects of such drugs, and without in any way adopting an hysterical approach to the problem, I ask the Minister whether he will have an urgent investigation made of the drug cortisone and the views expressed by Dr. Kelly. Will he assure the Senate that he will seek the best available advice, if necessary from sources outside his department? Finally, will he consider appointing a committee of specialists to advise him on this whole matter?

Senator WADE:
Minister for Health · VICTORIA · CP

– I saw the newspaper article referred to by Senator Cohen, and the author of it cannot be challenged. He has a high standing in medicine. At the outset I would like to point out to Senator Cohen that cortisone is on our list of pharmaceutical benefits, but is restricted. I give an example of how these restrictions apply: Repeated requests have been made to the Pharmaceutical Benefits Advisory Committee for the addition of cortisone to the list, for arthritis sufferers. In the wisdom of the committee this has been resisted right from the inception of the scheme. To give another example: Cortisone is available as a life-saving drug in asthma cases. Any one dangerously ill with asthma, whose life is threatened, is permitted to get cortisone on the free list. Senator Cohen has asked me what I would do by way of investigation into the side effects of this drug. I have had put into my hand to-day the first copy of the “ PrescribersJournal “, which is the latest contribution that the Government has made to dealing with this matter of the side effects of drugs. By a coincidence, the first issue sets out at great length the value of cortisone and its side effects. It gives in detail the findings of the independent committee. This is the only copy I have, but if any honorable senator would like to have a look at it to see what is being done in this field, I should be very happy to make it available to him. If, after seeing this journal, Senator Cohen would like to pursue his further suggestion that a committee be established to investigate this drug, I should be happy to talk to him about that. However, I believe that the latest contribution that the department has made in dealing with this problem should go a long way towards meeting the situation that Senator Cohen has mentioned.

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Senator SCOTT:

– I direct a question to the Minister for National Development. In view of the fact that for pastures and crops to be grown successfully in the Northern Territory quantities of superphosphate are necessary for their establishment, will the Minister give me the latest information about the discovery of phosphate deposits in that area?

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

– There has been no recent development and I can give the honorable senator no information additional to that which I have already made public. Preliminary drilling tests have been carried out, and a drilling programme has been laid down to be carried through to completion this year. Until that programme is completed we shall not have an accurate idea of the size and quality of the deposit. We are going ahead as quickly as circumstances will permit.

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– My question is directed to the Leader of the Government. Is he aware that in 1955 the Commonwealth Government made a grant of £10,000,000 to the States towards the capital cost of mental hospitals on the basis of £1 from the Commonwealth for each £2 spent by the States? Is the Minister aware that Victoria’s allocation was spent by 1960, and although some great improvements were made, it is found now that, as the Commonwealth has failed to renew the grant, further plans for the treatment of the mentally ill and retarded children have had to be postponed? In view of this will the Minister urge the Government to renew this grant for such an important undertaking as looking after the mentally ill and retarded children?

Senator WADE:

– The Leader of the Government has asked me to reply to this question as it appertains to my portfolio. It is true, as the honorable senator has said, that in J 955 the Commonwealth Government made a grant of £10,000,000 to the States, the Stoller report having revealed a serious inadequacy in buildings and equipment in mental hospitals. The grant was made available to the States on a population basis, that being the basis of distribution agreed to by the States and the Commonwealth Government. What the honorable senator said is true. Both. Victoria and Tasmania have expended their grants, but some of the other States have substantial amounts remaining unspent. I pass no comment save to say that as the original distribution was made on a population basis I think the honorable senator will agree that it would be difficult for the Government to start another series of grants while those amounts remain unspent. I might say, too, that no Commonwealth Government, regardless of its political colour, has ever accepted responsibility for mental hospitals. lt has always been argued, quite rightly, that treatment is free. The Government’s assistance has been designed to meet the needs of the indigent by paying a portion of their hospital and medical treatment. That is the whole basis of the Government’s philosophy so far as its hospital benefits scheme is concerned. The trend in mental treatment to-day is towards taking a new look at it, inasmuch as many patients are being picked up before they become chronically ill. They are treated as out-patients. A great deal of progress is being made in this matter. Those are the facts of the situation, and I have nothing more to add at this stage.

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– Is the

Minister representing the PostmasterGeneral aware of the dissatisfaction of people living in the North Midlands area of Western Australia and the northern portion of the State, with the inadequacy of the existing radio broadcasting services in those areas? Is he also aware of the recognition that has been given by the Australian Broadcasting Control Board, in its report for 1959 and the recommendations made therein, to the necessity to provide a better service for those areas? Will the Minister inform the Senate of the action that has been taken, or that it is proposed to take, in regard to (a) the medium frequency station at Dalwallinu; (b) the recommended station at Carnarvon; and (c) the stage that has been reached in providing increased wattage at the station at Kalgoorlie?

Senator WADE:

– Earlier to-day, Senator Drake-Brockman complained to me of the inadequacy of the radio services provided in this area by the PostmasterGeneral’s Department, and 1 sought and obtained the following information for him: Tenders have been received for the construction of the mast for the station at Dalwallinu, and an order has been placed for the work to be done. The tenders for the construction of the transmitter building have been received and are being examined. The building should be completed by about May, 1963. The station is expected to commence operations by the end of 1963. Plans for the transmitter building at Carnarvon are nearing completion. The station is expected to commence operations in the financial year 1963-64. There is no proposal to increase the power of the Kalgoorlie station, but the radiating system is to be converted to an anti-fading type to improve service to outlying areas. The design work on the matter, which is complex, is proceeding. The improved radiator is expected to be in operation about the middle of next year.

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Senator TANGNEY:

– Is the Minister for Health aware that an asthma foundation has been established in New South Wales with the intention of developing research into asthma and other respiratory diseases? Is there any prospect of this project being developed on a nation-wide basis under the aegis of his department, so that all the facilities for research that are available to the Commonwealth Department of Health may also be made available to those who are doing their utmost to find the causes of, and a cure for, this very distressing complaint?

Senator WADE:

– I am aware that a foundation has been established in New South Wales. To date, no move has been made to develop a similar body on a national basis.

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– Has the attention of the Minister for the Navy been directed to a report of a statement, made at the annual meeting of the Canberra branch of the Naval Association of Australia, that Australia is inadequately defended and that Australians felt insecure because adequate defence did not exist on our northern shores and in the Trust Territories? Would the Minister care to comment on the statement?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I read in the *’ Canberra Times “ this morning a statement, attributed to an unnamed spokesman for the Naval Association of Australia, which indicated that he believed his association was concerned about what he described as the inadequacy of Australia’s defences. The Naval Association is a highly responsible and patriotic body, and I believe that whatever it says is said in the belief that it is for the good of Australia. Its members are entitled to express an opinion that the total amount provided for defence by Australia at present is not as much as we should provide. But that is entirely a matter of judgment and of balancing the priorities of expenditure in this field against the priorities of expenditure in other fields. What is not a matter of judgment, but a matter of ascertainable and incontrovertible fact, is that there is in existence in Australia to-day, in all the services, more defence in being and more logistic and manufacturing backing for defence in being than there has ever been before in peace time in Australia’s history.

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Senator BRANSON:

– Has the Minister representing the Minister for External

Affairs seen an . article published by the Returned Servicemen’s League, giving details of activities of the Communist Party’s establishment at Minto in New South Wales? Were these details supplied by a defector who was actually a student of the school, which teaches subversion and means of achieving the ultimate destruction of our democratic system of government? Is the Minister in a position to add any information to that which has already been disclosed? Are there any powers in the Crimes Act or any other act to deal with situations such as this?

Senator GORTON:

– I read in “ Mufti “, the magazine of the Returned Servicemen’s League, an article on this Communist indocrrination school. The article stated that the information in it had been supplied by a defector. I have noticed before in other journals similar articles on this Communist “school. AH that I can say is that the Communist Party is a legal party, having a legal existence, because the Communist Party Dissolution Bill and the referendum proposal seeking power to deal with communism were defeated - something for which the Opposition must accept full responsibility, as it fought to defeat the legislation and the referendum proposal. The fact that Opposition senators are now shouting, “ Hear, hear! “ and thereby accepting full responsibility bears out what I have said. The Communist Party is able, because of the protection afforded by the Opposition, which honorable senators opposite have just admitted, to run schools of this kind in Australia. That being so, the R.S.L. deserves to be commended for reporting to the Australian public in a sober, factual and restrained way, the activities of these people who, in my view, are traitors but are able to act legally because of the assistance that they received in the past from the Opposition.

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– I preface a question, which I direct to the Minister representing the Postmaster-General, by saying that the latest amendments to the Post and Telegraph Act enable hirers of television sets to be charged, during the period of hiring, a greater amount for viewers* licences than is collected by the Post Office. I have directed the Minister’s attention to this fact. He acknowledges that such a provision is in the act, and he agrees with it. Normally, I would put this question on the notice-paper, but because the matter has already been raised the Minister may have some information on it. Will the Minister ask the Postmaster-General whether he is aware that in allowing hirers of television sets to be charged for a viewer’s licence more than the amount of £5 normally charged he enables yet another hidden charge to be included in hirepurchase contracts? Further, is he aware that this violates a long-standing ethic precluding the making of profit from goods and services rendered by the Post Office?

Senator WADE:

– I have not had the opportunity to discuss with the PostmasterGeneral the matter raised by Senator Willesee, but on the honorable senator’s own admission, this provision is in the act. That being so, I fail to see how any criticism can justly be levelled at the PostmasterGeneral. Senator Willesee’s complaint is that people who get their licences on hirepurchase terms have to pay additional amounts for the convenience so obtained.

Senator Willesee:

– An additional amount for the £5 licence. The hirer pays £5, and is charged an additional amount for the hire.

Senator WADE:

– As I understand the question, it is a package deal - a television set plus a licence - and for that convenience the hirer has to pay an additional accommodation fee. That is part and parcel of the legislation. I do not know whether it would be quite fair to ask any owner of a television set to make fairly substantial sums of money available without some recompense for meeting the convenience of people who buy a television set on terms. I think it is only fair, really, to ask that some compensation be given to the people who provide money for the purchase of the licence. That is exactly what it adds up to. It is a package deal, and a person pays a loading for the convenience of getting both a television set and a licence on terms.

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Senator LAUGHT:

– My question is directed to the Minister representing the Postmaster-General. Will the Minister invite the attention of his colleague the PostmasterGeneral to the annoyance and dismay of people living in the metropolitan area of South Australia at the’ new times for the last clearance of letter pillar boxes in Adelaide suburban areas, these new times averaging about 7 p.m. instead of about 9.30 p.m. as hitherto? This resentment arises from the fact that the normal times for a householder to write letters is after dinner at night, and with the new abnormally early clearance of pillar boxes, such letters are not cleared until the next morning, their delivery being accordingly delayed.

Senator WADE:

– I am afraid that I cannot make any intelligent comment on the altered times for clearing these pillar boxes, but I give the honorable senator an undertaking that I will discuss the matter with the Postmaster-General and let the honorable senator know the PostmasterGeneral’s reaction to his submission.

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Senator TANGNEY:

– I desire to ask the Minister for the Navy a question. Since the Minister has just expressed his confidence in the Returned Servicemen’s League as a responsible body, has he noted the decision reached at the annual conference of that body in Perth in which in a sober, factual and restrained way, it expressed concern at the lack of adequate dry docking and naval dockyard repair facilities on the west coast? If he has noted that decision, can he tell the Senate whether any remedial action will be taken by his department?

Senator GORTON:

– I had not noticed the decision referred to by the honorable senator, but I am perfectly willing to accept her statement that the Returned Servicemen’s League, or some portion of it in Perth, made its views known, in the way she has indicated, in relation to dry docking and naval base facilities in Perth. This is a question that is dear to the hearts of all Western Australians, and it has been raised in this Senate and in other places on many occasions. I can give only the same answer now as I gave not so long ago in Perth, and which I have given on other occasions in this place. The answer is that it would be of assistance to naval defence to have dry docking and naval base facilities in Western Australia. However, the matter is still one of priorities, and in my view it is better to have ships and weapons to fight with, even if one has to go without the duplication of a naval base. It is better to forego the duplication of a naval base and to have the ships and weapons with which to fight. When we can have both, I shall be glad to see that we get them.

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– My question is directed to the Minister representing the Minister for Supply. What is the present practice adopted by the Army in the disposal of its surplus four-wheel drive motor trucks of all types? Is there an order of priority to government or semi-government authorities in regard to the disposal of these surplus vehicles? If there is any order of priority, does it include local bush fire brigades, and if so, what is their order of priority? If bush fire brigades are not included in the priority list, will the Minister consider allowing these fire-fighting organizations, which voluntarily perform duties vital to the protection of life and property throughout the country, the right to purchase suitable vehicles direct from the department?

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

– As they become surplus, the vehicles of all Commonwealth Government departments are passed over to the Department of Supply for disposal. The Department of Supply has a system of priorities for the disposal of these vehicles. Commonwealth and State departments have first call upon them, and local authorities may purchase any not required by Commonwealth or State instrumentalities. The honorable senators mentioned bush fire brigades in Western Australia. I understand that in Western Australia the local authorities apply to the Bush Fires Board for any vehicles they require. If there are any vehicles not required by Commonwealth, State or local government bodies, that board will allocate them as applications are received.

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Senator BENN:

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

  1. Has (h« Minister caused any scientific enquiries to be made into the scarcity of whales this year in the Moreton Bay area?
  2. Has his department considered any proposal to preserve the supply of whales or to arrange for action at an international level to ensure that some protective facilities are provided for them7
Senator WADE:

– The Minister for Primary Industry has supplied the following answers to the honorable member’s questions: -

  1. Continuous scientific investigations on the stocks of humpback whales which migrate along both the east and west coasts of Australia have been carried out by the Commonwealth Scientific and Industrial Research Organization Division of Fisheries and Oceanography since the industry was re-established in 1949. These investigations have been directed to determining the condition of the stocks and the effects of exploitation by the Australian land stations as well as the Antarctic expeditions.
  2. Australia is a party to the International Convention for the Regulation of Whaling, 1946, and has been represented at each annual meeting of the International Whaling Commission since the commission first met in 1949. Under the convention, humpback whales from Croups IV. and V. in the Antarctic, which migrate respectively along the west and east coasts of Australia and on which the Australian whaling industry has been virtually dependent, have been permitted to be taken in the Antarctic by the pelagic whaling countries on only four days in each season since 1953. In 1960, an Australian proposal that humpback whaling in Area IV. of the Antarctic be prohibited and that the season in Area V. be reduced from four to three days was accepted by the International Whaling Commission. Unfortunately, one of the pelagic whaling countries exercised its right to object to this proposal and, with others following suit, it did not become effective. Towards the end of 1960, the Government arranged for Mr. J. V. Moroney, secretary of my department and Australian Whaling Commissioner, to visit Japan in company with industry executives to endeavour to persuade the Japanese to withdraw their objection. Whilst the Japanese were unwilling to withdraw their objection, mainly because two of the pelagic whaling countries had withdrawn from the convention, they did agree to voluntarily restrict their operations on humpback whales in the Antarctic to two days in Area IV. This decision was circulated to other pelagic whaling countries with an appeal that they also observe a similar restriction. In spite of the restrictions in the Antarctic and the operation of a quota system in Australia, the humpback stocks have obviously been seriously depleted in the last two years or so and this season there are insufficient humpback whales visiting our east coast to warrant the whaling stations continuing their activities over the usual catching period. The International Whaling Commission is at present examining proposals for placing neutral observers on all the factory ships operating in the Antarctic and Australia has strongly supported these proposals! Unfortunately, however, a great deal of damage seems to have- bees done to the humpback whale slocks in the Antarctic.

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– I have received letters from Senators Laught and McKellar requesting their discharge from further attendance on the Regulations and Ordinances Committee.

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

That Senators Laughtand McKellar be discharged from attendance on the Standing Committee on Regulations and Ordinances.


– I have received from the Leader of the Government in the Senate a letter nominating Senators Cormack and Prowse to be members of the Regulations and Ordinances Committee.

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

That Senators Cormack and Prowse, having been duly nominated in accordance with Standing Order No. 36a, be appointed to fill the vacancies now existing on the Standing Committee on Regulations and Ordinances.

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Ministerial Statement

Debate resumed from 14th August (vide page 171), on motion by Senator Spooner -

That the following paper: -

Common Market Negotiations - Statement by the Prime Minister dated 9th August, 1962 - be printed.


Mr. President, before this debate on the statement on the European Common Market negotiations made by the Prime Minister (Mr. Menzies) was adjourned last night I said that anything that could be done in Europe to strengthen the North Atlantic Treaty Organization would be of great value and could ensure peace in our time and in the time to come, particularly if Great Britain was a member of the European Economic Community.

I am aware that much has been written and said in recent months on all aspects of the question of Great Britain joining the Common Market, including its possible effects not only on Australia but also on other Commonwealth countries. I have read and thought a good deal about this matter. In regard to the remarks that I will now make, a senator here or there, a member of another place or a reader of “ Hansard “ in the future may say, “ I said that originally “. He may well be right, because I have tried to make a precis of the views with which I agree and which have been expressed previously by perhaps more learned and experienced commentators and spokesmen than I.

This idea of a European Economic Community is nothing new. Sir Winston Churchill advocated it, I believe, away back in 1947. I do not think any one would argue that a European Economic Community would not be valuable to the world, but the big question is whether it is possible and whether it would be effective without Great Britain. What does history reveal? Germany involved the nations of the world in two world wars, and brought its own people to degradation in the Second World War. France, an ally of Great Britain, has had ten changes in her system of government in the last couple of hundred years. Italy submitted to Mussolini, and it is a recognized unhappy fact that in these days in which we live Italy has more members of the Communist Party than any country outside Russia and the Communist satellites.

It is difficult to imagine that countries like that could really unite, particularly without the leadership and experience of Great Britain. Unless Britain becomes a member, the European Economic Community will have no nuclear power of any value as a member. I think all senators would agree with me that if Britain did not enter the community America would not give the community the secrets and experience of nuclear energy that she possesses. If Britain became a member of the community we would find that both financial and scientific help would be forthcoming from America to give the European Economic Community nuclear power. If we believe that one of the purposes of the European Economic Community is to safeguard peace and to help the Western world to build up its strength against Russia and its allies it is necessary that the community should have nuclear power. Without Britain’s leadership, experience and strength, the community would be useless, and Europe could again become, to our sorrow, a volcano of war. A divided Europe can never match the strength of Soviet Russia and her satellite countries.

Some unity in Europe is needed. These remarks are on the score of peace in the world, and have nothing to do with the economics of Australia and other Commonwealth countries.

Now 1 refer to Australia’s position. As I see it, the objectives of the Australian Government, with the backing of the Australian people, in respect of Britain and the Common Market, fall into these divisions: The first objective surely is to ensure that we retain markets in the United Kingdom for primary products and manufactured articles for which we have had long-term agreements. We originally grew these primary products and set up manufacturing concerns to provide Britain with what she needed. We believe we should be entitled to retain markets for them in the United Kingdom or at least have fair entry for them into the markets of the Common Market countries. We should not only retain the quotas that we now have; we should be able to expand exports as the requirements for them occur. We should have a fair deal on the markets of Europe and should not lose our preferential tariff. 1 would not be so immodest as to say that the Prime Minister (Mr. Menzies) supports mc, but I support the statements made by the Prime Minister in the speech which we are now debating. He said -

Discussions wilh British Ministers made it clear thai, until the meeting of Prime Ministers was held-

This is about markets and preferences - all such arrangements as that announced in relation lo “ hard manufactures “ would be tentative only; that they were not binding . . .

So we are still hopeful that in the negotiations Australia’s interests in respect of hard manufactures and primary production will be considered. I am against, and I think the Government is against, this settling period, or phase-out period as it has been called. We should be given a fair go without a time limit on it, because we have been the basic provider of so many things that the United Kingdom wanted.

The other aspect that Australia should be concerned about is this: If we are going to lose markets - and that is a possibility - we should now be working to find markets elsewhere. If any government can boast of a proud record of taking that action - and doing so successfully - it is the

Menzies-McEwen Government. It did not wait for this debate or for the last meeting that was held in England on the subject. lt has been doing all it can, in the most successful way, to develop markets in countries to our north. Mr. McEwen, as Minister for Trade, has shown the way to private enterprise in the development of trade. He has awakened private enterprise to the fact that a live-wire Commonwealth Government can be of great assistance. It cannot be denied that before Mr. McEwen became Minister for Trade the attitude of private enterprise to the Commonwealth Government’s promotion of trade was, “ No. We do not want the restraining hand of Government on us. Private enterprise will do it better. You governments keep out.”

Mr. McEwen overrode the opposition of private enterprise, and now 36 trade posts have been established abroad. The Department of Trade has sent four survey missions overseas and has initiated three trade ships. A pretty effective campaign of publicity has been undertaken in various countries to promote the sale of our goods. This has been not only a big campaign; what is far more valuable to the primary producer and manufacturer is that it has been an effective campaign to sell our goods. I do not want to cite many figures, but here are some. For a period of nine months for the year 1959-60 Australia exported to mainland China fi 2,400,000 worth of goods. For the first nine months of the 1961-62 period we exported ?46,800,000 worth of goods to China. In the case of Singapore the equivalent figures are ?8,400,000 for 1959-60 and ?12,000,000 for the first nine months of 1961-62. The trade with other countries also has increased as a result of the initiative of the Department of Trade and the waking up of private enterprise which has followed the lead set by the department. There have been large increases in trade with Hong Kong, India and Japan. In the case of Japan the value of our trade increased from ?99,S00,000 to ?141,000,000. As we were reminded so forcefully last night by Senator Scott, in this chamber and in another place members of the Labour Party told us of the awful things that would happen if Australia entered into a trade treaty with Japan. They said that such a treaty would kill the textile industry, and would do this and that to

Australia. However, the present Government had the numbers and also the foresight and initiative to go on and negotiate the treaty. I repeat that in 1959-60 we sold £99,000,000 worth of goods to Japan whereas during the first nine months of 1961-62 the value of our exports to Japan amounted to £141,000,000.

On the other hand our exports to France and Great Britain have decreased. I believe that is due to the possibility of Britain’s joining the European Common Market. The figures I have cited are important. They demonstrate that Australia can increase its exports to countries outside the Common Market, and that therefore we should not start crying about the possible effects of Britain’s entering this market. It is true that if Britain does join the market our export trade will be down by £150,000,000 to £200,000,000 a year.

Senator Kennelly:

– Is that not what Mr. McEwen says?


– That is what he fears. No one can deny that we shall possibly lose that trade, but on the brighter side this Government’s policy, the work of the Department of Trade and the waking up of private enterprise will cushion the effects of entry into the Common Market by Great Britain.

Another point we must remember is that Australia and the United Kingdom have never fallen out. We have had minor disagreements, but Australia has never been let down by Great Britain. Mr. Macmillan, the Prime Minister and Mr. Duncan Sandys - who came to Australia in connexion with this matter - have stated their attitude, as have other spokesmen for the British Government. Time and time again it has been said that Great Britain will not enter the Common Market under conditions which would have a serious effect on Commonwealth countries such as Australia, Canada and New Zealand. I would be the last to doubt the word of people like that, or of the representatives of any government that was in power in Great Britain. Mr. Gaitskell, the Leader of the British Labour Party, has said that he is opposed to the entry of Great Britain into the Common Market if the conditions of entry will have a serious effect on Commonwealth countries.

The two major parties in Great Britain hold the same view. As I said last night, calamity-howlers should be discouraged because I do not believe that calamity will overtake Australia or any Commonwealth country as a result of Britain’s entry into the European Economic Community.

I shall say no more except to quote a portion of the Prime Minister’s speech which we are debating. I believe that it is appropriate to the views I have been expressing. Australia’s case has been put strongly and forcibly, not only to the British Government, but also to the United States and other interested parties. In his statement the Prime Minister said -

What we have sought to make clear is that if Great Britain went in, and if in the course of time the extended European Economic Community became a European political community with the structure of a federation, the nature of the present Commonwealth would be clearly and materially changed.

That brings me to the point at which I started last night. I said that, in my opinion, Great Britain would not enter the European Economic Community. I should like to hear other speakers express an opinion on this, but I believe that if she does enter the community her influence as a world power will be reduced. The British Parliament and Whitehall would lose in power and status, and that is something that the Western world cannot afford to suffer.

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

Mr. Deputy President, the proposal that Britain should join the European Economic Market is very interesting, and is significant in two ways to the world, and to Australia in particular. First, the entry of Britain into the Common Market is of political significance, and to me that is the most important aspect. In Europe, there are various countries all hoping to be able to keep out of the Russian orbit, but they are not combined. If Great Britain joins the European Economic Community the chances are that these countries will get together politically and become a tremendous force to be reckoned with in the European zone.

At present, we have a combination of nations known as Nato, which we believe will look after the defence of the nonCommunist countries in Europe, but we want something much stronger than that. We are confronted with a very strong country that has the nuclear power and the weapons that could easily overthrow the Western European countries. If the nonCommunist countries combined together in a firm economic and political alliance, much of that danger would pass. There would bc a balancing of power. Russia would not then be prepared to start things in the European zone. I believe that that is the first significant feature of the European Common Market negotiations and the most important one. There would be no war in the world if communism did not hang over the heads of the various nations. There would still be difficulties and perhaps local strife, but the great thing that is dividing the world to-day is aggressive communism. The combination of the countries of Europe into a political union will do much to contain Russian communism within its own boundaries. So, it is very important that the United Kingdom should become a member of the European Economic Community.

When we look at the economic side of this question, we can sec great trouble ahead for Australia. Mr. Menzies and Mr. McEwen have been doing a very good job in putting forward our claims to economic recognition by the people of Europe. Many people no doubt will say that the political aspect of the matter is the most important one, but that should not prevent the leaders of our Government from making a good bargain and fighting for the economic rights of Australia. If we went so far as to bring the negotiations to an end, we would be doing something that was wrong for mankind as a whole, but there is no reason why the leaders of this country should not fight all the way to obtain concessions from the countries of the Common Market.

Some people who are strongly in favour of Great Britain entering the Common Market are not keen to put obstacles in the way of her entry. They should remember that Great Britain proposes to join, politically speaking, not so much for its own sake as for the welfare of the people who form the Common Market at the moment. Great Britain intends to join so that those European nations will be able to continue to exist as free nations. Because it is for the benefit of the people of

Europe for Britain to join the Common Market, why should not the countries of the Common Market allow some of the concessions that we seek instead of holding fast to a set pattern of conditions? It is for their benefit, as well as that of the people of Australia, for Britain to join the Common Market.

When we consider the political aspects of the matter and their effect on Australia, we must acknowledge that they are important, too. At the present moment, a great deal of the strength and interests of the United States of America is tied up in the European zone. I should say that we in this country are in a more dangerous position than are the European peoples. We live in a sphere where we need protection. If Great Britain joins the Common Market and the Common Market countries become a strong political force which can safeguard itself, the United States will be relieved of some of its obligations and will be able to turn more of its attention to the Pacific zone. We shall then feel very much safer than we do at the present time. The United States will be able to take the lead in combining the non-Communist nations of the Pacific into a confederation for the purpose of ensuring their survival. I believe that that is what will happen, once the United States is relieved of its responsibilities in the European zone. The nonCommunist countries, such as Australia, Japan, Korea, Formosa, the Philippines and Thailand, will then be able to look forward to future security because Chinese communism will be contained within its own boundaries, as Russian communism is contained in Europe.

On the economic side, I believe that Mr. Menzies holds the key that will either unlock the door to Britain’s participation in the Common Market or lock it. Over the years, the United Kingdom has relied tremendously on her reciprocal trade with Australia. If Mr. Menzies used the fact of that trade in the nature of blackmail against Great Britain, I do not believe it would go into the Common Market. If the Prime Minister of Australia wished to be harsh, he could make effective use of the trade weapon. I hope that Mr. Menzies is successful in what he has set out to do and that his submissions receive consideration from the Common Market countries, so that Great Britain may be able to join the Common Market on acceptable terms. If the negotiations that we are trying to bring about with the various countries should fail, what can we in Australia do about it? After all, we are the ones who will be affected economically. Certain Australian primary industries will suffer great hardships. Unfortunately, they include industries which have been established in irrigation areas as a result of much effort. We do not want them to suffer. Therefore, we have to look to the future and plan right at this moment. Of course, we should have been planning for some years to meet the possible effects of the Common Market arrangements.

The going will become very much harder. We must decide on the best thing to do for the various industries that will be affected. Our dairying industry will meet with tremendous competition. It is being subsidized now to a substantial degree bv the Government. We must ensure a reorientation of the resources of this industry into some other fields. Much dairying is conducted on marginal areas which are not really suitable for the purpose. The industry will have to get out of those marginal areas.

We may look to South-East Asian countries for the sale of milk powders. There is a tremendous opening there, and we should reap a good deal of the harvest. It is said that the people of those countries have not the money with which to buy our products. At Devonport, where I live, the only factory in Australia producing Ovaltine is situated, ft uses malt, eggs and milk powders, and practically all of its production of Ovaltine. which is quite expensive, is sold in South-East Asia. Butter is not eaten in that area, and we must develop a market there for powdered milk. We should be setting aside money to assist the reorientation, where required, of primary production With the onset of automation in factories we advocated the re-training of people affected. We now advocate action of a similar nature in primary industries.

Negotiations now proceeding are very serious, because the result may determine whether or not the world survives. The political aspects of the European Common Market are the most important for the welfare of mankind. This combination of countries could be a tremendous force in deterring the onrush of Communism in

Europe, leaving to America leadership in the Pacific area. However, this should not restrain us and our leaders from working as hard as possible to get the best deal. The people with whom we are dealing must realize that for their own benefit and safety, as well as for our own, conditions should not be made so hard that it is impossible for the United Kingdom to join the European Economic Community.

I commend the Government leaders upon their fight. I hope that it is successful, ‘.h-it The Six listen to their representations. ,ind that Australia has an opportunity to continue her universal trade. If she has not, she will be given a stimulus to look for new markets, and perhaps in the Iona run the overall effect will be beneficial because of our having to get out and fight for ourselves.

Senator LILLICO:

.- This is the third occasion in the past twelve months upon which we have discussed in this chamber a statement on this subject. I doubt whether, since the proposal was first mooted more than twelve months ago, the issue of the United Kingdom’s entry to the European Common Market has become very much clearer except, perhaps, that there is a consensus of opinion among interested people that basically the idea of the Common Market is political. I call to mind two speeches made by the United Kingdom Prime Minister upwards of two years ago, in which he stressed the need for a closely knit political entity of more than 250,000,000 people in Western Europe as a buttress against the further encroachment of communism. He said that the balance-of-power tactics that used to be employed by the mother country in Europe were a thing of the past and that if, in effect, a third world power could be brought into existence, this would make it at least easier for the free world to survive. Of course, that is looking a long way ahead. Whether or not it is possible for the countries of western Europe eventually to become so closely knit as to establish such a political affinity among them that they could be regarded as a third world power, I do not know, lt would certainly take a great deal of time, but, if it is a question of survival, without a doubt that transcends all economic considerations.

T sympathize with those people who look with a good deal of sorrow at the prospect of changes in the British Commonwealth of Nations and at the fact that the Mother of Parliaments may lose some of its jurisdiction. If this proposal comes to fruition in a political sense it is a foregone conclusion that the Mother of Parliaments would never be the same again. As we found when the Australian States federated to become the Commonwealth of Australia, you cannot have a political alliance unless some of the sovereign States entering into the alliance forfeit some of their powers. That is an obvious conclusion. Because that is basic, the formation of an alliance must become a political matter. You cannot have an economic entity such as that envisaged unless it is accompanied by political obligations. Because of that fact, J cannot understand the criticism levelled by Senator McKenna last night at the Prime Minister (Mr. Menzies) for his remarks about the political aspects of the proposed European Economic Community. The Prime Minister’s statement was magnificent. It was factual. It set out in clear and unequivocal language the position that docs exist.

This is a terrific decision for the mother country to have to make, and I can understand the tremendous responsibility that devolves on the British Government at the present time. Even some of Mr. Macmillan’s own supporters in the Conservative Party are not at one with the government in its attempts to have Britain join the European Economic Community. I note, Mr. Deputy President, in yesterday’s ; Daily Telegraph “ Mr. Alan Reid’s commentary on the views expressed by a British member of Parliament, Mr. Peter Walker. Mr. Walker said that six months ago a sample poll - I assume that it was somewhat similar to the gallup polls in this country - had shown that 52 per cent, of British voters were in favour of Britain’s entry into the European Economic Community, 25 per cent, were against, and the rest were undecided.

Senator Ormonde:

– The rest are like the Country Party.

Senator LILLICO:

– The British people are not fortunate enough to have a Country Party. Perhaps they would bc better off if they did. Mr. Walker said that a recent poll had shown a staggering change of opinion; 43 per cent, of voters were against Britain’s joining, and 37 per cent, were in favour. If any credence can be given to that poll, it certainly indicates an amazing change of front by the British people.

Senator Hendrickson:

– Because they are being informed.

Senator LILLICO:

– They will be informed, as I am trying to inform the honorable senator. Mr. Deputy President, we in Australia, particularly at the outset, have been more concerned with the economic repercussions in Australia of Britain’s entry into the Common Market. I suppose that this is natural, as the economic repercussions would affect us more directly. We have been concerned about that aspect of. it. Unfortunately, it is a fact that the most important aspect is the political implications. In these days it is important that we keep up our export trade. It is vital to our development and, incidentally, to full employment, that our export trade be maintained, and even increased.

I agree absolutely with the Prime Minister’s observation that a general economic survey which looks at national totals divorced from a consideration of particular industries, regions and so on, can be most misleading. Percentages, as we know, can often be misleading. Some people say that, after all, 8 per cent., 10 per cent., or 15 per cent. - 15 per cent, is the highest percentage 1 have heard - is only a small percentage of our trade to be affected, and that this will represent only £80,000,000 or £100,000,000 loss of trade if Britain takes this step and safeguards are not provided for our exports to the mother country. I am reminded of one of Napoleon’s theories. He used to say that if you attack a given strategic point and overwhelm it, the whole front will lose its equilibrium, waver, and often disintegrate. We “are in much the same position. We cannot reckon these things in percentages or in millions of pounds. The fact remains that our most important export trade is being threatened at a time when loss of markets would be felt throughout the whole community.

Mr. Peter Walker, the British member of Parliament, is of opinion that it would be a bad economic proposition for Great Britain to enter the Common Market. He makes the claim that, economically, Britain has very little to gain. One can sometimes learn something from the Opposition, and Mr. Whitlam has worked this out for me. In his speech he referred to the fact that Britain produces only 8 per cent, of the butter, 26 per cent, of the sugar and 36 per cent, of the wheat she uses. He went on to speak of dried fruits and other commodities. Of course, we already knew that Britain was far from self-supporting, but those figures emphasize her inability to produce enough to maintain the way of life of her people. So it must be of great advantage to the rest of Europe to have such a unique potential market close at hand to which surplus foodstuffs may be sent.

Senator Scott:

– Who is this man?

Senator LILLICO:

- Mr. Peter Walker is a British Conservative member of Parliament and claims to be the leader of 100 Conservative members who are opposed to Britain’s joining the European Economic Community.

Senator Ormonde:

– He is Britain’s Mr. Killen.

Senator LILLICO:

– If he is, he is not a bad fellow. Taking British food production into consideration, one can understand how tremendously important it is to The Six to have such a potential market close at hand to which they can send their surplus food supplies.

Senator Hendrickson:

– What will they get in return?

Senator LILLICO:

– -They will be paid for their products in the same way as other people are paid for their products.

It might seem strange that a country with 2,000,000 people should have a surplus, but the “ Quarterly Review of Agricultural Economics “ a publication of which some of us take a great deal of notice, points out that there has been a significant increase in the output of agricultural produce in other parts of the world. Amongst other things, that publication states -

The agricultural revolution that began in North America is rapidly spreading to other continents, especially Western Europe, with consequent rise in productivities and in production.

It goes on to say -

Virtually every country in the world has put into effect some system of national support policies designed to maintain farm prices and farm incomes at levels higher than would otherwise be the case.

The following statement seems to me to be most significant when we take into consideration the economic position of most countries in the free world to-day: -

The under-developed countries are all in balance of payments difficulties, because of their need for capital goods. They therefore tend to curtail food imports and to pursue policies of self-sufficiency in foodstuffs where possible.

Right through the article it is stressed that this trend is taking place the world over, thus making it more and more difficult for the various countries to find markets for their surplus exportable food products. It has been said in this chamber and in another place many times that we depend on primary production for about 80 per cent, of our exports. All the indications are that there is a tightening up of markets for primary products all over the world.

That brings me back to what I said when I first spoke on this subject in this chamber. At that time, I referred to the need for the under-developed countries to import plant, materials and all those other things necessary to bring about vital development if they are to raise their standards of living, and it would seem to me now that if the European Economic Community intends to make of itself a closed society or, as one leading newspaper put it, a rich man’s club, if it intends to exclude as far as it possibly can trade from the rest of the world, it will not be a good thing for the free world, and especially for the under-developed parts of the free world. Let me repeat this passage from the “ Quarterly Review of Agricultural Economics “ -

The under-developed countries are all in balance of payments difficulties because of their need for capital goods.

As they lack the capital goods so necessary for their own development, they tend to curtail the importation of foodstuffs and to boost the production of food within their own borders as much as they possibly can. If one of the greatest, if not the greatest, potential markets in the free world proposes to adopt a closed-door policy, then, despite the fact that it is envisaged that the European Economic Community will be a buttress against communism, it will, in fact, partly defeat that objective because it is essential in the interests of the free world, of the under-developed parts of the free world in particular, that trade should flow as freely as possible.

While the Prime Minister and the Minister for Trade (Mr. McEwen) have done all that two men could reasonably be expected to do to safeguard the trade of this country, it must not be forgotten that 43 per cent, of Great Britain’s exports go to Commonwealth countries and approximately only 19 per cent, to The Six and that our trade with the mother country is in the proportion of about three to two; so that, in actual fact, we lose out badly in trade with both the mother country and the United States of America. When we consider these facts, we find it easy to understand why certain people should arrive at the conclusion that it would not be a good economic proposition for Great Britain to join the European Common Market. Upon reading an article published in “ Muster “, the official journal of the Graziers Association of New South Wales, I was interested to note the pattern of Australia’s trade with the South-East Asian countries. That pattern is so much in our favour that one wonders just how long we can carry on without being required to purchase more from those countries. After all, trade is a two-way business.

Senator Cormack:

– The Labour Party will not recognize that.

Senator LILLICO:

– It has recognized it in connexion with our trade with Japan. In 1962, we exported £125,000,000 worth of goods to Japan and imported from that country only £30,000,000 worth of goods. In the same year, we exported to Hong Kong £14,000,000 worth of goods and imported only £4,000,000 worth. We exported £16,000,000 worth to India and imported only £10,000,000 worth, and we exported £10,000,000 worth to Singapore and imported only £1,000,000 worth. In the same year, we exported £2,000,000 worth of goods to Burma and our imports from that country were so few that it was impossible to break down the figures. The same position obtained in our trade with China. We have a most favorable balance indeed with Japan. It does seem to me, especially if their living standards can be raised so that they are in a better position to purchase from us, that much of our salvation must lie with the countries in eastern and south-eastern Asia. Not long ago I was talking to a man who is interested in the export of beef. This Government has done all that it possibly could do to encourage the export of beef and lamb to South-East Asian countries, particularly Japan. This man said to me: “ One of the great difficulties is that steak, when it arrives on the Japanese market, retails at about 15s. per lb., so we cannot expect the people of Japan, where the average wage is £5 a week, to buy much steak”. That is the great difficulty that we encounter in trading with such countries. Yesterday, somebody said that Australia was doing very little to raise the standard of living of Asian people. I suggest that the honorable senator who said that should secure a copy of the latest report on the Colombo Plan, which details exactly what Australia and other countries are doing in that direction.

I have almost exhausted my time. I go back to where I commenced and say that, although Senator McKenna referred to the hypotheses made by the Prime Minister, I agree with Senator Vincent that most of what can be said about this matter is hypothetical. If Great Britain must join the European Economic Community in order to survive, if the community can grow eventually into a solid entity - I admit that whether that can be achieved is very arguable - and if in this way the survival of the free world against the worst tyranny known to man - communism - can be ensured, then this development will have been well worth while.

Senator COOKE:
Western Australia

.- Madam Acting Deputy President, it is always a pleasure to listen to Senator Lillico. His speeches are very reasonable, balanced and fair. Obviously, he has given considerable thought to the subject under discussion. During his speech he was very embarrassed, probably for the same reason as makes the Opposition critical of the Government, namely, the deep concern that the Government only now is showing for Australia’s position in the event of Great Britain joining the European Economic Community. This belated concern must be regretted not only by the Government and the Opposition but by all Australians. It is idle to say that the Government has not been well and faithfully advised by Great Britain, the Opposition and people interested in world trade that Australia would have to take stock of her trade if she did not wish u 10 deteriorate when Europe recovered from the Second World War in which Britain stood almost alone against the tyranny of totalitarianism.

We have heard some strange submissions. The Prime Minister (Mr. Menzies) has made a report to the Parliament five years too late. It is a factual report. A good deal of hysteria was shown by both the Prime Minister and the Minister for Trade (Mr. McEwen) when they went overseas to address representatives of great and responsible nations with which we have always enjoyed, and still enjoy, the most harmonious relations. We trust and honour one another and we co-operate with one another in trade, defence and every other sphere that binds one country to another.

The Prime Minister and the Minister for Trade are reported to have expressed to Great Britain Australia’s concern about our position if our mother country enters the Common Market. I say that they have over-stressed the difficulties for one purpose, that is, to hide the neglect and apathy of the Australian Government during a period of five years in which they were given serious warnings.

In 1957, when this Parliament ratified the latest trade agreement with Great Britain, that country was associated with the European Free Trade Association which is composed of Great Britain, Sweden, Norway, Denmark, Austria, Portugal and Switzerland. The Treaty of Rome was in operation. The countries constituting the European Economic Community at that time - 25th March, 1957 - were France, Germany, Italy, Belgium, the Netherlands and Luxembourg. That community was far vaster and more complicated than the European Free Trade Association.

I can refer to “ Hansard “ to show that when the 1957 trade agreement with Great Britain was being discussed I asked specifically whether we would have an opportunity to debate these matters immediately after the ratification of the agreement. Ot course, the agreement was a fait accompli. It was ratified after it had been signed.

Senator Cormack:

– Do you mean the Treaty of Rome or the agreement setting up the European Free Trade Association?

Senator COOKE:

– I mean the trade agreement between Australia and the United Kingdom, which was ratified by the Parliament in 1957. That was when grave consideration was first given to this matter by the Opposition. Strong requests were made to the Government to have the effects on Australia investigated.

In order to get a clearer picture of the position in Great Britain, we should disregard the Prime Minister’s statement. While it is factual, it is a vindication of his trip overseas, the submissions he made and the drastic action he took. The United Kingdom Information Service has released a document containing a statement by the Lord Privy Seal, Mr. Heath, with which the Labour Party agrees. It reads -

We are living in a period of intense change politically and economically in the world around us . . . We are seeing to-day that Europe has recovered an enormous amount of its strength and with that recovery has come confidence in itself and a spirit of pride and independence.

This has been expressed in the European Economic Community together with a determination of its members to strengthen their voice and influence in Europe.

The Community would become a centre of strength and influence and it would develop policies and opinions about every matter affecting world and international affairs. They would develop policies towards the under-developed countries. The more the Community develops the more powerful will its influence become.

The document continues -

Mr. Heath said that throughout the world today one saw the emergence of surpluses of raw materials and foodstuffs, temperate and tropical products. One saw an acute need for stability in the developing countries of the world. The industrial countries had entered a new phase.

Mr. Heath makes the position quite clear by saying, “ Britain had to decide whether this country should stand outside, or should be excluded from these develop-, ments”. The Lord Privy Seal then continued:

I have no doubts about the ability of this country, in examining these movements, to play its full part should they decide it was possible to become a member of the Community.

Will the United States or the Commonwealth look upon us as better and more valuable partners if we remain outside the main stream of economic growth?

We believe, provided we make proper arrange* ments, we should be prepared to play our full part in it.

Note these words, “We believe, provided we make proper arrangements . . .” It is obvious that Great Britain was anxious to make proper arrangements, but the Australian Government has not been prepared in the past five years to make proper arrangements on behalf of Australia. That is the lamentable situation. Great Britain is geographically in a position that forces her to recognize this great economic force. Her action will be taken with full consideration for the Commonwealth, but the Government in Australia will try to maintain its front with a veneer of concern cloaking its inefficiency, neglect and complacency over the past five years. The Australian public will never be given an opportunity to see clearly what Britain’s action means to Australia. Britain will protect the Commonwealth to the limit consistent with sustaining herself politically and economically. We do not have to worry about Britain; we have to worry about the fears and neglect of a government trying to maintain the status quo that has been so beneficial to the people that it represents - the exporters, the investors, the bankers, the insurers and all those who rake in the freight charges and invisible charges that have been crushing Australia as an export nation despite the fact that we have the most bountiful country with the highest per capita production, and everything in our favour.

With this change of conditions, by which the status quo m trade will be disturbed and Australia will have to take her place as a nation and trade in the areas in which trade with Australia is both welcome and to some degree developed, we find ourselves thoroughly unequipped to do the job. That is the tragedy of this business. Australia has no fears or doubts that Great Britain will do the best she can in these circumstances to preserve the British Commonwealth of Nations and maintain her relationship with the Commonwealth in every respect, economically and politically. The Labour Party will go as far as the nation can be permitted to go to keep these relations strong and complete.

Senator Cormack:

– Would you agree that there should be a reasonably freer import of manufactured goods from Great Britain in order to maintain that relationship?

Senator COOKE:

– That would be determined on the- trade balance from time to time. This, is not like buying a pound of cheese. To give an answer to that off the cuff would be stupid. We have to maintain our position with Great Britain and trade with her as far as we possibly can on a reciprocal basis.

Senator Cormack:

– But only to that extent?

Senator COOKE:

– No. You cannot isolate a section of trade and say “ only to that extent “. The field is too wide to pinpoint one particular facet and say what we will do. That is not the answer. When we come to examine the position that has developed we find that Mr. Gaitskell, speaking in relation to the attitude of the British Labour Opposition towards membership of the Common Market, is reported as follows in referring to tropical products: -

We could not possibly accept discrimination in favour of the Common Market against the products of our own former African colonies.

Caribbean products must be covered equally. There should be parity for the Commonwealth in those products for which preferences were granted to former French colonies. Mr. Gaitskell did not like the idea that preferences and aid for countries like Nigeria and Ghana should depend on their becoming associated countries.

For manufactured goods from under-developed countries he favoured some system whereby the kind of arrangements Britain had made in Pakistan, India and Hong Kong might also be made by other members of the E.E.C.

Temperate foodstuffs, he regarded as “ the hub of the problem “. If the negotiations about them went wrong New Zealand could be hit very badly. The basic E.E.C. proposals were “ pretty frightening .

He thought it “ pretty intolerable “ that products from outside the Common Market should never be able to compete at lower prices with the products of member countries. He also criticized American objections to the association of neutrals like Switzerland and Sweden with the Common Market.

It is obvious that the British Labour Opposition is mindful of the need for Britain to protect that reciprocal trade with the Commonwealth as far as it can.

Then we have to consider Britain’s position. The Prime Minister, of course has had to deal severely with many of his old, close and revered friends in bringing his policy to the point to which it appears he proposes to take it. The mirror that always reflects the ripple from our English mother country is found here. When the Government dealt with Mr. Bury with such great intolerance, it showed its inability to discuss Australia’s position in relation to the European Common Market in a fair, unbiased way. We are throwing the problem entirely upon the shoulders of Great Britain as if we were holding her by the hips and saying, “ If you go in you are going to damage your family”.

I believe, and the Labour Party believes, that if Britain goes into the European Economic Community it will be a severe blow to the British Commonwealth. Australia, which has the closest association - an almost complete blood relationship - with Britain will be the hardest-hit member of the British Commonwealth of Nations. We believe that action should have been taken long before this; but even now - immediately - some action must be taken by the Government to ensure that Australia is able to trade effectively. It must ensure that the lines of communication - transport, shipping - which are so necessary to effective trading are developed so that Australia can trade without any inhibition in the proper geographical markets for Australia. Freights have increased; so have insurances. Invisible charges in every area have increased and questions to the Government, particularly from Australian Country Party and the Opposition, in relation to these matters, have not been answered. We have been given no satisfaction. If Britain joins the European Economic Community and Australia trade must be diverted to these areas in which markets have recently been developed, we will be left high and dry unless the Government takes now the action that could have been taken five years ago. We shall be at the mercy of the shipping companies of some of the countries with which we trade. Anybody with experience in shipping knows that the basic necessity of a trading nation is to have its own shipping line. If a country that exports goods cannot bring other goods back in its own ships, its costs will be high. If we could establish our own overseas shipping companies and also meet the cost of invisible imposts represented by insurance and other charges we would be able to make up much of the losses that will occur if Great Britain enters the European Common Market. But the Government is not prepared to do this; it prefers to maintain the status quo.

If Great Britain joins the Common Market we must give our primary and secondary industries protection. Consideration must be given to the manner in which we trade, and to our capacity to trade freely without being dependent on other nations. Shipping, and many other matters, will have to be considered, because they are the very fundamentals of trade.

I shall now refer to the debate in this chamber on 9th May, 1957 on the United Kingdom-Australia Trade Agreement, and I quote from my speech as reported on page 628 of “ Hansard “. On that occasion I said -

I went on to point out that, regardless of what any government might do in a matter of trade agreements, even such a loosely drawn agreement as the one now under consideration, no good result could come from a trade agreement unless the government was prepared to grapple with the ever-increasing freight rates, or would itself provide some other means whereby our products could be transported to the markets of the world at a minimum cost. The Government has done nothing to solve that problem. Indeed, it has refused to deal with the most important subject of rising freight charges. Incidental charges on goods exported have risen also, in some instances by over 100 per cent. It is natural to expect that Britain will choose the best and nearest markets geographically in order to get goods at the cheapest rates. She has done that.

I was referring to the decline in Australia’s trade with Britain, which was very obvious at that time. In the same debate I referred to the European Common Market in these words -

The document before us can scarcely be called an agreement. It is something that has resulted from discussions that took place, and which led to the Prime Minister’s statement. While the agreement - for convenience we shall call it an agreement - was being negotiated, the British Government entered into a free trade plan with six European continental countries - Germany,. France, Italy, Belgium, Holland and Luxembourg - under which those countries could sell to one another more readily. If the goods covered by the pact with those continental countries removed entirely the duties on their goods entering Great Britain, it is obvious that Australia cannot get any preference over them under this agreement. That is made more obvious when we consider that they are much better situated geographically to serve the British market. Therefore, unless the Australian Government adopts a more imaginative approach to this subject, our trade with Great Britain will still further deteriorate, because Britain will draw its requirements from those European countries.

I said that in 1957. I could see then that the Government was quite complacent about these matters. On the same day I quoted from Article 6, paragraph 3, of the agreement between the Australian and United Kingdom governments on wheat. Paragraph 3 reads -

The two Governments agree that if in any year the quantity of Australian wheat and flour imported into the United Kingdom should fall short of 750,000 tons (wheat equivalent) or such smaller quantity as may be offered by the Australian Wheat Board on commercial terms they will consult together at the request of either Government.

I commented on that as follows: -

We will then be told that regard is being had to British domestic policies, and that, if we cannot place our wheat on the market at an economic price, it cannot be sold.

Paragraph 3 continues -

In the event that such consultation is requested the two Governments will for this purpose establish an inter-governmental committee to meet in London to consider the reasons for the short fall and possible solution.

I asked -

Why not guarantee it now? We will be fuddling and fumbling around, as the Government has already done for a considerable time, the result being that huge quantities of wheat await shipment from this country, whilst freight charges are rising all the time. Real confusion obtains.

The position is clearly pointed out there. It was obvious to anybody, and must have been obvious to the Government. Even at that time there were developments between Great Britain and the Economic Community. I went on to say, as reported at page 632 of “Hansard” for 9th May, 1957-

At that stage, after everything has been messed up, they can ask for the agreement to be renegotiated. The two governments will have consultation, they will express sympathy to each other and will cry on each other’s shoulder. If that does not produce satisfactory results, an inter-governmental committee may be established to review the situation, and if that is not satisfactory - the agreement displays great expectation - we can negotiate a new agreement. If the parties to the agreement anticipated so much trouble, why did not they write definite terms into it?

The arrangement between Great Britain and Australia could not have been put more clearly. From that time on the Government should have known the position. I went on to say -

We should have an agreement to sell within the British Commonwealth of Nations, in free and proper bilateral trade, a certain quantity of our goods, which could be fixed at as low a figure as was considered safe, and beyond that we should develop our trade with those markets which are favorably situated to us from a geographical point of view. We have not done that. We have not expanded our trade with other countries to a proper extent. Great Britain, because of economic necessity, has no compunction about trading elsewhere. It is a manufacturing nation, which has to trade. We are willing and anxious to supply all the raw materials necessary to make Britain a strong trading nation, but we cannot continue to allow our trade to deteriorate by reserving this market for Britain, and restricting our trade with other countries where the trade balance is entirely in our favour.

This was patently obvious to everybody, but the Government did nothing about it, and now, in the dying hours of the negotiations, it has invited representatives of the Labour Party to go to Britain to look at the corpse of the British Commonwealth and the trade agreement between Australia and Great Britain. Let us hope that the Australian and British Labour Parties will be able to reach some positive solution. Calamity howlers say that Australia cannot maintain its position. Given proper trade facilities Australia can trade competently, provided the Government adopts a national outlook on our world trade and our relationship with the European Economic Community. On 9th May, 1957, I continued -

A further aspect of the agreement must be reckoned with. I ask the Government to consider preparing a proper summary of our competitors who are subsidizing goods for import into the United Kingdom. They are making it impossible for us to sell goods on the English market at economic prices. The Government should consider doing something about that matter.

Further, in relation to freights, the Government should give us some statement of what it is prepared to do to assist our exports to Great Britain. I should like the Government to give us, at some stage, an analysis of the White Paper issued by the United Kingdom Government on about 4th February, 1957, on the free trade plan which has been negotiated between that government and various European governments, because it concerns various commodities in which we are vitally interested. If that free trade plan were agreed to, there would be good reason for an immediate move on the part of the Australian Government to negotiate a more satisfactory trade agreement w’ith Great Britain. In any case, if the sympathy for our producers and exporters which is expressed in this agreement is to be given practical effect, the Government should move early to get something more positive, definite and real tor Australia to base its economy on.

That was said in 1957. Now, the Government is panicking. The Opposition contends that the Government has been maintaining the status quo and has been frightened to disturb anybody but the primary producers, the exporters and a few others in this country. It has allowed the matter to proceed for so long. We cannot expect for a moment to be able to dominate Britain’s economic future. Britain will look after that side of the matter, after full consideration has been given to the Commonwealth position. An assurance has been given by Mr. Gaitskell and the United Kingdom Labour Party that before they will consent to Great Britain joining the Common Market arrangements must be made to protect Commonwealth trade and political relations.

On 30th October, 1957, I asked the following question in the Senate: -

I preface a question, which I address to the Minister representing the Minister for Trade, or the appropriate Minister, by referring to statements that have been made in connexion with the trade agreement between the United Kingdom and Australia. Previously, I asked the Minister to present to the Senate the White Paper on the common market agreement made by the United Kingdom with certain European countries. I now ask him whether it is a fact that Dr. Westerman, representing Australia at the recent General Agreement on Tariffs and Trade conference, stated our position by saying that Australia could not see how minimum price controls on agricultural products within the common market could work effectively without internal and external trade restrictions. He went on to say, speaking on behalf of Australia -

In effect the common market treaty holds out the real possibility of an aggregation and intensification of the restrictive and protective practices of the individual members.

I also ask the Minister whether he is prepared to place before the Senate the plan referred to by Dr. Westerman in these terms when, apparently, he was speaking on behalf of the Australian Government. Dr. Westerman went on to say that Australia suggested that, in relation to agriculture, the six common market nations should form their plans in detail and provide safeguards to ensure that the fruits of economic progress within the market could be shared with other contracting parties. Will the Minister make available to the Senate and the Parliament plans envisaged by the Government, so that we shall not be obliged to discuss a fait accompli, as happened in the case of the United Kingdom Trade Agreement which, apparently, is now causing fear in the minds of the Government and its representatives?

Senator Spooner gave the following reply ;

The honorable senator’s question is too complicated to be given a complete answer. In brief, the problem that arises as a result of the establish ment of these European organizations is to reconcile the British desire to have access to increased continental markets with the desire to retain preference for the British dominions, particularly in respect of agricultural products. A lot of water will run under the bridges during negotiations at the General Agreement on Tariffs and Trade conference and elsewhere. I do not think it is practical to ask for the Government’s plan which covers that aspect. Australian representatives, on both ministerial and departmental levels, will constantly seek to keep the door wide open . . .

That has been the attitude of the Government in relation to this matter over a period of five years.

We can sympathize with Great Britain in her predicament. We have every confidence that, as far as she possibly can, she will protect both her own interests and those of the Commonwealth. I say advisedly that this Government has failed deplorably, over a period of five years, to make suitable provision to meet the effects of the Common Market arrangements and the possible deterioration of our trade. As it is, the Australian nation is unprepared to meet a situation which could arise at any time.

Senator McKELLAR:
New South Wales

– My remarks on this subject will be made in the capacity of a layman. I do not propose to examine in great detail the overwhelming complexities of the Treaty of Rome, with its 248 articles. At the outset, I want once again to take the opportunity to pay a tribute to the Prime Minister (Mr. Menzies) for the work that he has done for Australia in connexion with the European Economic Community, and also to the Deputy Prime Minister (Mr. McEwen). It will be recalled that Mr. McEwen went overseas and emphasized the importance to Australia of the trade aspects of the European Common Market, and the dangers confronting us. He was followed by Mr. Menzies, who discussed the political aspects of the matter.

Senator Cooke has charged the Government with doing nothing for the last five years to meet the possible adverse effects of the Common Market arrangements. I remind him that it is only about eighteen months since Great Britain made up her mind to approach The Six with a view to joining the European Economic Community. It is obvious, therefore, that any action that could have been taken during the last five years would have been based on an even more hypothetical situation than the action being discussed now. I arn one of those who feel, I think with good reason, that there is no certainty at this stage that Great Britain will enter the European Economic Community. If the terms of her entry are not too harsh, she may join; but from what one gathers, it appears that the terms that have been laid down could well be too severe for her to go on with the idea of joining. Therefore, it behoves The Six, as we have come to know them, to look pretty hard at that aspect of the matter. Their desire to have Great Britain come in, which no doubt is very great, may not be consummated because the demands on her are of such a nature that she cannot honour the promises she has made over and over again to Australia, Canada and New Zealand.

Because of the efforts of our Prime Minister and Deputy Prime Minister, those interested have been made aware of the difficulties and complexities which can arise in carrying out the terms of the Treaty of Rome. I agree with those who say that the political consequences of the Common Market could well be of far greater importance than the economic consequences. In saying that, I am not decrying for one moment the importance to Australia of the economic aspects. Let us have a quick look at some of the criticism that has been levelled at the Government on this subject. During the last three weeks, Mr. Whitlam, the Deputy Leader of the Opposition in another place, appeared in a television programme in which, I think, Professor Arndt and Mr. Alan Johnson also took part. I understand that Mr. Whitlam was asked to state the views of his party on the Common Market negotiations. He said that at that stage it had not made up its mind. If that is so, obviously a very quick appreciation and decision have been made. Listening to speeches made in this chamber, and taking note of those made in another place, we gain the impression that these views have been held steadfastly for periods up to five year.s, so it appears that somebody is not quite on the ball.

I dispute Senator McKenna’s claim that the Prime Minister was not doing the correct thing in putting up what was termed a hypothetical case with regard to the United Kingdom’s loss of sovereignty. I think that the Prime Minister had a perfect right - in fact, it was his duty - to point out the dangers that could arise to the United Kingdom’s sovereignty from entering this alliance, which might well be called a confederation of European States. I shall deal with that a little later. I cannot see where any criticism can be levelled at the Prime Minister on that score.

I was very pleased to hear from Senator McKenna praise of Australia’s representatives for the way in which they have been putting our case. That was a generous tribute, which I think is well deserved. When we were discussing this matter before the recent recess Senator McKenna adopted what I thought was an Australian viewpoint rather than a party viewpoint. I hoped that that attitude would be adhered to by all Opposition senators.

Also prior to the recess Senator Ormonde addressed some factory workers outside Sydney, impressing upon them the importance of the United Kingdom’s proposed entry into the European Common Market. He told them that if this action were taken it would have a very great effect upon them and could even jeopardize their jobs. But lo and behold, only a little later there was another statement, allegedly emanating from him and published in the newspapers, to the effect that Australian trade to the value of only £30,000,000 per annum was involved. This is so far from the truth that if Senator Ormonde said it he could not have been serious. - We have been castigated by Opposition senators for not having done something about this problem. We were told that we should have been awake to the development of trade with Asian nations. We remember what happened when the Japanese Trade Agreement was reached only a few years ago. In the last sessional period we had a very frank and generous acknowledgement from Senator Kennelly that, although he had opposed that treaty, it had been well worth while for Australia. Honorable senators opposite cannot have it both ways. If they allege we did not do the right thing in the way of looking for trade surely we cannot be criticized when we do the very thing they say we should have done.

At this stage I want to repeat some figures issued by the Department of Trade and mentioned by Senator Vincent in a very able address last night. In 1949 there were 32 Australian trade officials in seventeen posts in thirteen countries. In 1962, we have 73 trade officials in 36 posts in 27 countries. Since 1949 posts have been opened in. Asia at Karachi, Manila, New Delhi, Kuala Lumpur and Bangkok. Since 1954 twelve major trade missions, three trade ships, and four trade survey missions have gone to Asia, Africa and South America. They have visited Malaya, Singapore, India, Ceylon, Thailand, Hong Kong, the Philippines, Japan, Indonesia, British North Borneo, Pakistan and the Persian Gulf. When we compare the three-year period ended 30th June, 1961, with the three-year period ended 30th June, 1956, we note that Asia has grown dramatically as an important market for Australian goods. Japanese imports from Australia rose 100 per cent., from an average of £66,000,000 to an average of £132,000,000 and exports to other Asian countries rose from an average of £87,000,000 to an average of £101,000,000. These exports to Asian countries are still growing. During only the last two or three weeks we have been told of the appointment of another trade mission, under the leadership of a Queenslander.

We in Australia can still offer to the Western nations something that is very valuable to them. To begin with, we are definitely an anti-Communist nation, to which no concessions have to be made in the hope that we will be weaned away from Communist doctrines. We have proved our worth as allies in two world wars. We have shown how valuable our terrain can be in the testing of atomic weapons of all kinds and in the tracking of satellites. In this sphere there are very big possibilities for the future. In addition, we have the very great advantage of being a valuable base.

The figures I have given show very definitely that we are not afraid to go out after new markets. This process has been going on for the past three or four years. It is well known to everybody in this chamber that part of the Government’s programme for the future is to go out after additional markets whether or not the United Kingdom joins the European Common Market. We look upon this as a challenge. That has been stated over and over again. If the United Kingdom joins it may be in the nature of a calamity, but we shall not lie down under it. Time will be necessary to develop new markets after they have been found. That is why there has been so much opposition on Australia’s behalf to a short transitional period for the relinquishment of United Kingdom preferences.

Coming from New South Wales, which provides 30 per cent, of all our exports, I think it is only fitting that that State should have some voice in this matter. The attitude of many people has been that primary industries will probably be affected, but that is just bad luck, and these industries will be subsidized in order to tide them over. It is said that that is all that we need to do, and the problem is dismissed in that way. But not only our primary industries will be affected. If we lose £80,000,000 or £100,000,000 worth of exports how will that affect our balance of payments? We must remember that imports to the value of £570,000,000- my figure may not be accurate - are required for our secondary industries. If our primary industries are affected by loss of markets the impact will be felt all along the line. This is something that all people should remember. It will affect employment and unemployment. Let me emphasize once again that since World War II. primary production has increased by 50 per cent., without any increase in labour force. In one sense that is not a good thing, because if primary industries employed more labour unemployment would be relieved. But the stark fact is that returns from primary industries are so low that money is not available for use in providing employment.

What will happen if the United Kingdom does join the European Common Market? Australian wheat may very well be affected, as well as meat, sugar, butter, metals, dried fruits and quite a few other commodities. Unless the United Kingdom is successful in obtaining for us the terms that we have asked her to obtain our. wheat might be1 admitted at a price of, say, £30 a ton, with the imposition of a duty which may range from £1 to £11 a ton. That duty would not go into general revenue but would be used to subsidize wheat-growers in the Common Market countries. If the United Kingdom joins the market it seems as though Denmark, Norway, Ireland, Greece and Turkey will also join. This would probably mean that there would be about 300,000,000 people in this market. Half the world’s wheat exports and threequarters of the world’s dairy and meat exports would then go into the Economic Community. These would include a great volume of export items from our country. We have had 30 years of trading rights with the United Kingdom, and by reciprocal arrangements those rights have been bought and paid for. We have had goods from Great Britain, on terms favorable to her, in return for our export conditions, and therefore I say that those trading rights have been bought and paid for.

In the ten years to which I have referred we have bought from Great Britain more than £1,500,000,000 worth of goods in excess of the preference items she has bought from us. I mentioned a while ago that there were 300,000,000 people in this area of Europe. They would be enclosed within four walls, we could say. About 1,000,000,000 Communists would be similarly enclosed, and 200,000,000 Americans would be within another four walls. We Australians would be on the outside looking in unless Great Britain entered the Common Market on terms that would protect our industries in the manner we seek.

We have heard allegations that the Government has been lax in its efforts in this matter in the past twelve months. Let us remember that over the past six or nine months our representative, Dr. Westerman, has had consultations in Great Britain with representatives from our wheat, dairy, meat, sugar, fruit and other industries. It has been acknowledged time and again that they have done a very good job, and no one will dispute the excellence of the work that Dr. Westerman is doing for Australia.

Let me now deal with the political aspect which, as I said, could be the most important one. Indeed, it seems that at this stage no one can envisage what the political implications may lead to. I do not doubt for one moment that Britain’s entry into the market must inevitably mean a disintegration of our Commonwealth ties and a loss of sovereignty to Great Britain herself. This morning I received a reminder about one of the doubts that occurred to me when I first read the Treaty of Rome. The treaty contains no escape clause. If Great Britain decides to join the Economic Community, and then the confederation of States operates on a common political basis, what will happen if one of the countries in the union decides that the arrangement is unsatisfactory and wants to get out? There is no escape clause. That is one of the questions for which no one seems to have an answer.

Let us consider the countries comprising The Six. France under De Gaulle has staged a wonderful comeback. France has stable government under De Gaulle. How long will De Gaulle be able to lead France? He is not a young man, and what will happen when he goes? We all hope that France will find a suitable man to carry on after him, but in view of its unhappy political history in the past 40 or 50 years, one must have very grave doubts whether this will come about. Other members of The Six are Belgium, West Germany - a former enemy; Italy, which at one time was another enemy; the Netherlands and Luxembourg. I mentioned earlier that if Great Britain joins The Six, it looks as though those other countries to which I have referred will also become members. If so, it could prove a strong antiCommunist alliance. There is doubt in the minds of many people that Britain’s entry into the alliance and her handing over of sovereignty as required may not turn out to be all that is hoped for. One of the disadvantages of the whole thing is that at this stage, naturally, no one seems to be able to envisage what will be the outcome.

Now, very briefly, let me answer some of the criticisms levelled by Senator Cooke, who said that Australia should have done many things five years ago. I have already mentioned the trade treaty with Japan. We made this treaty in the teeth of strong opposition from the opposite benches. We have been organizing trade missions and endeavouring to find fresh markets for the past three or four years, and as I said before, this will continue.

This subject has been ventilated to such an extent in the past 24 hours in this place and in another place, and it has received so much publicity overseas that many people will now be very weary of it. I thought it was rather striking to hear in the 10 o’clock B.B.C. news last night mention of the speech of Mr. Bury in another place yesterday. So the eyes of the world are focused upon Australia’s attitude in this matter, and upon what members of parliament in Australia are doing about it. As honorable senators are aware, a private member of the British Government, though not officially representing that government, is now in Australia campaigning against Great Britain’s entry into the European Common Market. To-day I received information from one who ought to know something of the position in Britain that at this stage a little more than 50 per cent, of the British people are in favour of their country’s entry into the market. Whether Britain enters will depend upon the terms of entry. After all, we may still derive some comfort from the reiterated statements by Great Britain’s representatives that she will not enter if it is considered that the Commonwealth would suffer and would be obliged to make sacrifices as a consequence. We have the further comfort that if the conditions laid down for her entry are too harsh, the British Parliament itself will vote the whole thing out.

So, Sir, let us consider the whole matter broadly. There is no doubt in my mind that if Britain does enter the market, even upon the most favorable terms, it must result in primary producers making considerable sacrifices for some time, though in the long run we will probably be better off. If so, we must remember the old saying, “ Live horse, until the grass grows “. Of the economic and political consequences, by far the more important are the political ones, of which I am fearful. I sincerely hope that if Great Britain enters the market, my fears will not be realized. I know that Great Britain will do the best she can for Australia, Canada and New Zealand, and I can only hope she will bc successful.


.- Mr. Deputy President, we are discussing a report of the Prime Minister (Mr. Menzies) on his trip abroad. I do not think that any one can deny that as far as he was able, he advanced the cause of Australia as we see it. Senator Vincent said that this debate was about a very hypothetical situation. All we know up to date is that Britain has made an application to join the European Common Market and that no finality has been reached upon her application. Nobody knows on what terms she will be admitted, or whether she will accept the terms. If one can judge from what one reads about the feeling in Great Britain, it would seem that the vast majority of the Conservative Party favours the application, whilst a small minority opposes it. The Leader of the Labour Party in Great Britain, Mr. Gaitskell, has stated that his party will oppose the application if it believes that Britain’s joining the European Common Market will result in great economic harm to the countries of the Commonwealth. That point is further highlighted in a report in one of the Melbourne newspapers last evening of a speech by Lord Attlee, a man who has a good deal of influence in the British Labour Party even to-day. The trade union movement of Great Britain is also opposed to the application.

The position is in a state of flux to-day, and I say with great respect that it is time this Parliament stated its case. Now is the time when we must look, as we are entitled to do, at what will happen to Australia if Britain joins the European Common Market without receiving any concessions. If she does that, there can be no doubt that Australia will be dealt a great economic blow, the effects of which will be felt for some time and we should say emphatically to Britain that if she joins without receiving concessions we will immediately reconsider the concessions which we now give her. Because we are part and parcel’ of the Commonwealth is no reason why we should not set out in precise terms the stand we will take. This is a hard bargaining affair, and while I have no wish to hurt the British people, I do have a very keen desire to protect our own citizens. I do not think we shall get far by discussing what Britain’s entry into the European Common Market will mean to our butter, wheat and dried fruits industries, because we do not know exactly what will happen, but I do think this Government is at fault in not acting sooner than this.

It will be recalled that about two and a half years ago Mr. Menzies came back from one of his trips abroad and reported that Dr. Adenauer, the German Chancellor, had said to him in conversation that Britain would eventually join the European Common Market. It will also be remembered that Mr. Menzies did not agree with Dr. Adenauer. I have no objection to a man pitting his opinion against that of another, but at the time it seemed strange to me that the Prime Minister of this country should be so emphatic in putting his opinion on matters relating to European politics against those of a man who had been actively connected with politics in Europe for some years. After all, Mr. Menzies did not prove himself to be a great diplomat when he took part in the Suez discussions and when he discussed Australia’s position at the United Nations Organization and, having had those two political setbacks, one would think that the Prime Minister of this country would have given the matter more serious thought before opposing the opinion of Dr. Adenauer, and lightly brushing it aside in his report to us on his visit overseas.

The Treasurer (Mr. Harold Holt) is not without blame, either, because, in his 1961 Budget speech, he related what had happened at the finance conference which he attended on behalf of Australia in September, 1960, and it is my view that this Government was unwise in not taking a more serious view of the position then. I do not think there is one honorable senator in this chamber who wishes to do other than protect the economic position of Australia, but, as I have stated previously, I believe that the main considerations so far as Europe and Britain are concerned are more political than economic.

Certainly the trade union movement of Great Britain does not agree that Britain’s overall economic position will be strengthened by her joining the European Common Market if she loses the preferences she enjoys from the other Commonwealth countries and I repeat that in my view it is only wasting time to speculate on what could happen in unknown circumstances. I ask leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

Sitting suspended from 5.45 to 8 p.m.

page 197



Debate resumed from 7th August (vide page 26), on motion by Senator Paltridge -

That the following papers -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other Services involving Capital Expenditure, for the year ending 30th June, 1963;

The Budget 1962-63 - Papers presented by the Right Honorable Harold Holt in connexion with the Budget of 1962-63;

National Income and Expenditure 1961-62; and

Commonwealth Payments to or for the States - be printed.

Senator McKENNA:
Leader of the Opposition · Tasmania

Mr. President, the Senate is now debating the usual innocuous motion that comes before us at about this time of the year, to the effect that the Estimates and Budget Papers be printed. As usual, on behalf of the Opposition I move an amendment to the motion. I move -

At the end of the motion add the following words: - “ but that the Senate is of opinion that their provisions do not serve the best interests of Australia in that -

they will not correct seriously adverse trends in the Australian economy including unemployment and decline in migrant intake;

they make inadequate provision for the development of Australia; and

they fail to provide social service and repatriation benefits - in particular child endowment - on a just basis “.

Mr. President, the Opposition believes that the Budget now under consideration cannot be looked at in isolation, but must be seen against its background. I suggest that that background should bring some blushes to at least some of the faces on the Government side of the chamber. One must go back, first of all, to February, 1960, when the Government did a number of things. They included the sudden and almost complete lifting of import restrictions. The Government imposed bank credit restrictions but did not see that they were enforced. Above all, for the first time in Australian history the Government intervened in the basic wage case to help procure the freezing of the basic wage in Australia.

In the Budget for the year 1960-61, which was introduced in August, 1960, company tax was increased by 6d. in the £1 and rebate of ls. in the £1 in respect of income tax on individuals was discontinued. It had been granted only the previous year. Then we came to the famous date, November, 1960, when the Government imposed a most vicious credit squeeze and announced a system of compulsory contributions to Commonwealth loans from insurance companies and superannuation funds. The Government also increased the rate of sales tax on non-commercial motor vehicles from 30 to 40 per cent. Honorable senators will recall that interest on loans raised by hire-purchase and finance companies was not allowed as a deduction for income tax purposes if it exceeded a specified level. They were most drastic measures which put the Australian economy in a strait-jacket.

But the extraordinary thing was that in three months almost every one of those proposals was reversed or modified. The Senate will recall that the additional 10 per cent, sales tax on motor cars was abolished after being in operation for only three months. The proposal that interest on loans raised by hire-purchase and finance companies be disallowed as a deduction was put into legislation but was made operative only until 30th June, 1961, that is, for a matter of a few months.

Senator Vincent:

– Were not the measures described at the time as being of a temporary nature?

Senator McKENNA:

– It could not be true that they were described as being of a temporary nature because the provisions in relation to the insurance companies and superannuation funds are still operating.

Senator Vincent:

– I was referring to the other measures.

Senator McKENNA:

– There was a variation of the proposal in relation to insurance and finance companies. Instead of legislative compulsion, economic compulsion was applied, as the Treasurer of the day (Mr. Harold Holt) said, by incentives and disincentives in taxation concessions.

Tn August, 1961 - twelve months ago - we considered the Budget for the year 1961-62. It was a negative Budget, except for some increased social service and repatriation benefits. Then came the general election in December, 1961. In the following February we saw the most startling reversal of all the policies that the Government had affirmed down the years. We saw piece after piece snipped out of the Labour Party’s policy speech and adopted by the Government under pressure from the electorate and with very bad grace. Certain stimuli were provided for the economy. The trouble about the adoption of Labour policy was that the policy was adopted piecemeal and the total symmetry of the Labour pattern was ignored. Of course, no very good result has been achieved by what has been done.

In this Budget the Government adopts another piece of the Labour Party’s policy. The Senate will recall that during the election campaign Mr. Calwell stated that the economy needed the stimulus of a deficit budget of £100,000,000. The Prime Minister (Mr. Menzies) and Mr. Harold Holt were very vocal in affirming that that was the worst of sins against the Australian economy and it would be widely inflationary. Now, a few months later, what we said about those measures in 1961 and what we said about the economy have been proved true, even in the Government’s eyes, because with cool audacity it has budgeted for a deficit of £118,500,000. So, what was a grievous sin against the economy in November, 1961, is now a matter of great virtue in the eyes of this quick-change, stopgo Government. That is the extraordinary background against which we should look at this Budget.

Looking down the vista of two-and-a-half years, one sees that in that time there have been the three budgets to which I have referred and also four supplementary budgets. That is the type of conduct that has destroyed business confidence throughout Australia and has earned for this Government for ever the title of “ the stopgo Government “.

This reminds me of a story of a businessman who, after twenty years, went back to his university and looked up his old tutor who had taught him economics. He asked for a look at the examination paper for the current year. He was shown it and said, “ but these are the very questions that you asked me twenty years ago.” The professor said, “Yes, and we have been asking them ever since “. “ But,” said the businessman, “ the students will compare notes, so surely there is no virtue in doing that “. “ It is no trouble,” said the professor, “ we change the answers every year”. That is what this Government does. It has changed the answers seven times in two-and-a-half years and has not even found the right answer now. I am convinced that it will never find the right answer.

Last year the Treasurer complained of lack of confidence in the community. He urged the community to spend far more in order to stimulate business activity. In this Budget speech he makes the same lament and the same plea. Of course, this lack of confidence flows entirely from the action or Jack of action of this Government. This condition has been created by the misguided policies and the shifts and changes of policy of this Government in searching for the right answer.

In my fairly long experience in this place I have found that the Budget speech usually deals with the factors that operated in the past year and those that are expected to operate in the coming year, and puts forward the Government’s financial proposals. This is the only Budget speech that I have ever seen in my eighteen years in this Parliament which anticipates criticism of the Budget and sets out to answer it in advance. It is a most extraordinary feature in a Budget speech. This is the action of a Treasurer and a Government fearful and uncertain. Why is the Government fearful in this situation? First, it is fearful because of the strongly expressed wrath of the electorate which recently nearly destroyed it. The Government is uncertain because, by reason of its many proven failures, it at last is conscious of its shortcomings. At least, it would be to the Government’s credit if it were. Quite plainly, the Government lacks the bold leadership so urgently required to bring this country out of its economic stagnation. When I say that, I realize that I must assume a heavy responsibility to justify the statement that we are suffering from economic stagnation. Let me document that claim.

I turn to the White Paper issued by the Treasurer and to the other papers that we are discussing. I invite honorable senators to look at Table A, in the White Paper on

National Income and Expenditure. Looking at this with the others preceding it, I draw attention to the rate of increase. Honorable senators will agree that a survey of national income is a good index of how a country is progressing. National income rose by 10 per cent, in 1958-59; it rose again by 10 per cent, in 1959-60, but by only 4$ per cent, in 1960-61. In the year just concluded national income rose by only H per cent.

Senator Scott:

– But by 8 per cent, in the last quarter.

Senator McKENNA:

– That may be right. Senator Scott will have an opportunity to assert his views. The figures I am giving are inescapable. They are not my workings out but are recorded by the Commonwealth Statistician. The Treasurer himself has put them before us. I hope sincerely that the figures have improved. I do not believe that the measures embarked upon by this Government will produce any dramatic result. We must rely on the dynamic character of the Australian economy; we cannot rely on the Government and its thinking. This is the best index that I can put before the Senate. What does it mean? It means that over the past two years, more than £700,000,000 of income has not been earned which would have been earned if we had maintained the normal rate of increase in national income current for some years before then. This is the clearest indication of income falling until we reach the point of stagnation in the year just ended which we are now reviewing.

Let us turn to that great human element, the question of employment of our people. I have quoted these figures before and the Senate knows that one must go back to 1956 to get the picture. The little Budget in that year precipitated the spiral of unemployment we have had ever since, culminating in a figure of almost 132,000 good Australians unemployed in January last. Let me indicate the yearly peaks. In December, 1955, before these trends developed, the number of unemployed was 16,500. In the following year it was 38,000. In 1959 the figure had risen to 75,000 and for the following years it was 82,000 and 69,000. This lower figure was in 1960. The position was only just recovering when in November of that year the Government put through those stringent measures that put the economy in a strait-jacket and precipitated a depression. The Government speedily corrected that slight fall in unemployment, because in 1961 the peak unemployment figure was 116,000. The peak so far this year is 131,496.

Surely this is an indication of how the economy is going. Almost without interruption the number of unemployed has risen steadily year by year. Can there be any more scathing condemnation of the Government than that? For six years the number of unemployed rose like that, unchecked except at that point in October, 1960, when immediately the Government took action to ensure that more and more people in this country were precipitated into unemployment. If the Government did not do it deliberately it certainly achieved that result.

Last year in the Budget speech the Treasurer confirmed the Government’s devotion to the policy of full employment. Down the years he and his fellow Ministers have constantly had the words “ full employment “ on their lips. I invite anybody on the Government side to find the words “ full employment “ in this Budget speech. They have dropped out of the vocabulary of the Government and the Treasurer - as well they might, having regard to the results that had been achieved by the Government.

Let me refer to page 2 of the printed copy of the Budget speech. Perhaps I can find a reference on page 1. Here it is -

Unemployment is to be reduced further.

That is the Government’s approach to the matter. On page 2 these words appear -

Employment, though not as high as we would like to see it, is certainly high by the standards that prevail in many countries.

But what happens in other countries has nothing to do with us in Australia. The phrase “ employment is not as high as we would like” carries with it a corollary which induces me to ask the Government what is the level of unemployment that it would like to see. What would it like? I invite somebody on the Government side to answer that. On page 3 these words can be found -

This is because we expect unemployment to be reduced further in the course of the year.

The Government now talks only about reducing unemployment - not a word of the policy of full employment. The Government has thrown that out of the window. The figures that have been published up until 2nd August by the Department of Trade reviewing the five major industrial groups - covering 47 industries - show clearly that there is a vast unused industrial capacity in this country and that our great industries are not working to capacity. They have a great capacity for absorption of both men and materials if only they had confidence - if they had the stage set for them by a government which must accept responsibility for stimulating activity in the private sector. The Treasurer in his Budget speech admits this unused capacity.

Taking the position by and large, and striking an average, it is apparent that industry is working at about 80 per cent, of capacity. This confirms what was said by the Australian Industries Development Association - that if industry were to use its full capacity, and conditions were favorable, another 100,000 people in this country could be employed and many millions of pounds added to the national income. Every word that the association said is confirmed, right up to date, by this document from the Department of Trade, circulated only on 2nd August, 1962. One can go through industry after industry - 47 of them - and find that story of unused capacity. Now I ask: How are those 90,000 unemployed at the moment - even accepting the Government’s figure and having regard to the fact that the Treasurer admits in the Budget speech that room will have to be found this year for 85,000 new employees - to be picked up unless industry expands? Why does it not expand? The answer to that, of course, is that industry lacks confidence. I should like to ask honorable senators opposite: What about the Prime Minister’s statement before the last election - following our leader’s statement - that full employment would be restored in twelve months? What has happened io that pledge? To-day the Government talks only of reducing unemployment. What has happened to the pledge that Labour made and that Mr. Menzies immediately repeated? Is there any expectation that full employment will be restored at the end of this year? In the light of the present position the complete certainty is that we shall have at least 100,000 unemployed. With all the school leavers becoming available for employment more or less at the one period the number could be well over that figure. Will somebody on the Government side advert to that to indicate the attitude of the Government?

Let me read a question that was asked by my colleague, Senator Ormonde, on 8th August - only a few days ago - on that very point. The question was -

I direct my question to the Leader of the Government in the Senate, and preface it by asking him whether he recalls that some twelve months ago the Prime Minister, when speaking about unemployment, said - “ In about twelve months’ time we will all be wondering what we have been worried about.”

Senator Ormonde continued ;

Can the Minister tell me whether the Prime Minister has varied his views in that regard?

Senator Spooner replied ;

I find it impossible to answer that question until Senator Ormonde tells me what he is worrying about.

The Government, therefore, is not worrying about that pledge or about the unemployment position in this country. I do not think anything could indicate more particularly the attitude of the Government on this matter, forgetting all about full employment, than the reply that was given by the Leader of the Government in this place. Every member sitting behind him must accept responsibility for it.

I have alleged a stagnant economy. Let me move on to the next item in the White Paper, the gross private investment in fixed capital equipment - the capital goods and plant that go into industry and provide more and more opportunity for employment. .That expenditure rose in 1959-60 by 17 per cent., in 1960-61 by only 5 per cent., and in the year just ended it did not rise, at all; it fell by 8 per cent. At the very time when we have a mass of school leavers about to come on to the employment market we have 90,000 people unemployed, and industry is not spending money at the same rate upon new plant and equipment. This is because of the stagnancy of the economy for which this Government must accept the blame.

Let me turn to the personal consumption of the people of Australia. This covers the items of food, drapery, clothing and footwear. In dealing with this matter last year I commented that people were consuming less and less food. To-day the position is even worse. The consumption of these items rose by 10 per cent, ia 1959-60, by 6 per cent, in 1960-61 and it rose by only 1.7 per cent, in the year just closed. Despite the fact that our population has increased by 200,000 in each of those years, there has been a constant fall in the consumption of goods of that type. In relation to food the Statistician, at page 4 of his statement, dealing with the consumption of food and the increase of population, has this comment to make -

Expenditure on food is increased by 3 per cent., considerably less than the 7 per cent, increase in 1960-61.

Our people are eating less, and less is being spent on clothing and footwear and other vital and essential elements of life. That is an indication of stagnancy in the economy. The figures I have cited are not my own figures but those of the Commonwealth Statistician of this country. It is little wonder in these circumstances that the retailers of Australia are anxious when they look at their tills. They have been anxious for a very long time, and the figures for food purchases are one of the symptons of the stagnancy of the economy. It is no use looking for well-filled tills unless the people of Australia have work, and have the money to put in those tills. If they have work and are receiving wages they will spend. They look for confidence, but they look down the six years I mentioned when I began to speak and they see a sorry record. Does that give them hope for the future?

Senator Gorton:

– You would not expect them to spend more when prices were steady?

Senator McKENNA:

– Prices have risen consistently until quite recently. I shall deal with the question of costs before I conclude.

I wish to deal now with farm income, which is a vital matter in a country such as this. We are dependent upon our farms for our export earnings, and on those earnings for our imports. I dealt with this matter at length last year. I find now that the position has worsened. I point out that the income of only £485,000,000 from farms, when adjusted according to the consumer price index, was only half of the income that farmers earned in 1949-50. The figure is the same to-day as it was in 1949-50, or very close to it. I commented on this matter last year, and the estimate of the Statistician is that the income has fallen this year from £485,000,000 to £472,000,000. Surely I have said enough to document my claim that we have a stagnant economy. 1 wish to refer now to the measures taken by the Government to provide stimuli. One was to initiate a number of new works. Some of these moves were taken during the last two years. Few new projects have come into the picture. On this type of work scattered around the States - mainly small projects apart from the Mount Isa railway project - £9,798,000 was spent last year. The Treasurer proposes to spend £26,837,000 this year. Of that amount £8,300,000 constitutes new works. The new works are small projects the value of which varies from £145,000 to the largest, which is valued at £1,759,000. We are told that that will provide a great stimulus to employment. It certainly will have some effect, but let me put it in perspective. Let me assume - I am over-generous in doing this - that the whole of the £17,000,000 additional amount being spent on works goes into wages. Let us consider that in relation to our 90,000 unemployed. If the whole £17,000,000 went to them, with no materials in the picture at all, it would yield each of them £3 12s. a week, or an income of £188 per annum. If I added to that the interest-free States grants of £12,500,000, and made the same assumption that the whole amount would go in wages alone, that would add another £2 13s. per person for the 90,000 unemployed. If I added the two sums together, it would not amount, in the case of a married man, to the relief that he is getting in unemployment benefit. Those are not real stimuli. That is only tinkering with a serious situation. It is not giving to the unemployed any real hope at all.

I come now to the important question of oil search. I turn to October of last year, when we debated in the Senate the

Petroleum Search Subsidy Bill. On 3rd October, Senator Spooner, in closing the debate at the second-reading stage, said -

I pass on to what I regard as a major point raised by Senator McKenna. If I do not state it in proper terms I know he will forgive me. He raised a doubt about whether the appropriation of £2,700,000 this year would be sufficient.

He was referring to oil search subsidy. He continued -

However, the department has gone into this matter as carefully as it possibly can and it believes that the £2,700,000 will be sufficient to subsidize every operation that is justifiable after -

I think it should be “ up to “- 30th June, 1962 … I would be delighted if I had come to the Senate next June and ask for an additional amount because this estimate was wrong.

The honorable senator was wrong. He has had to come and ask for an additional £2,500,000.

My information is that, although some £2,500,000 of the £2,700,000 was actually expended, towards the end of the financial year there was an accumulation of applications that were not dealt with, and that the various companies - many Australian companies amongst them - went ahead with their projects after preliminary talks with departmental officers on the footing basis that the subsidy would continue on a 50-50 basis. I understand that no applications were approved or dealt with from 1st July until after the introduction of the Budget, and after Senator Spooner’s statement that the basis of subsidy was to be altered from 50-50 to 70-30. The oil search companies were to find 70 per cent, of the cost of the various geological operations open to subsidy, such as drilling and so on, and the Government would then find merely 30 per cent, instead of 50 per cent.

A sudden announcement like that, without warning, was grossly unfair, particularly to the Australian oil companies which, of course, are not as financially strong as the great overseas companies. They had made their budgets for this year. They were well embarked upon their activities. Many of them had given undertakings to their shareholders as to when calls would be made. They cannot undo those undertakings. They have to honour them. The decision certainly will mean the slowing down of oil search by many Australian companies in this current year.

Senator Scott:

– But not in the overall picture.

Senator McKENNA:

– If we are speaking of the eventual picture, yes.

Senator Scott:

– I mean, this year.

Senator McKENNA:

– It must, at the moment, mean a slackening off in activity, as the companies re-arrange their budgets to provide for spending over the year. It is true that another £2,700,000, or thereabouts, has been provided in this Budget for oil search subsidy. There is no question that more money will be available.

Senator Spooner:

– Double the amount last year.

Senator McKENNA:

– It might even be a little more than double the amount. We of the Opposition have never complained about the spending of money on the search for oil. We have eternally claimed that the search was being directed by the Government in the wrong way. We have complained about the method of directing the search. If it had not been for the fact that, down the years, the Opposition had stirred the Government on this subject, I think we would have had no oil search yet. We were constantly at it for years and years, before the Government moved.

We find that there is a scaling down of activity by the Australian companies at the present moment. It is most regrettable that there should be a halt at the very time when the tempo of the search for oil in this country was mounting. I agree with Senator Scott that the momentum will mount again, but why halt it? Why pull it up? This new proposal, which has imposed without warning unexpected financial strain upon the Australian companies, will tend to drive them still more into the arms of the overseas companies. I understand that there are in Australia at the present time many crews and rigs from Canada and the United States of America. Those crews came to this country in the belief that here there was a government which was earnest about oil search and eager to get on with the job. They came here without particular contracts. They are available and ready to wort. They have come out on speculation - on spec, as it is said - believing that the field was opening up. The representatives of some overseas companies have been heard to say that they are shocked by what the Government has done, that this is the type of thing they might expect from some minor republic overseas, but not from an Australian government that is faced with a vast need in this matter.

Let me spend a moment or two in briefly discussing the importance to Australia of the search for oil. There is no security for this country in imported oil. We have to find oil for the sake of our security. Let us look at the parts of the world that are close to us. We must realize how completely dependent we are on overseas suppliers for every gallon of oil that we need.

Senator Scott:

– Would you say that we have not found oil?

Senator McKENNA:

– I would not be so silly. I think everybody in Australia knows that oil has been found. I am one who believes that it will be found in increasingly greater quantities.

I want this Government to move on apace in what is such a vital matter. It is essential to our existence that we should find oil here in adequate quantities. In addition, it would play a major part in preserving our overseas balances. As honorable senators know, every year there is more than £100,000,000 of outgoing expenditure in this very important field. If we could be relieved of that burden by the discovery of oil in Australia it would make a most dramatic difference to our overseas balances. We have every reason, both economically and from the viewpoint of our security, to press on apace with the search for oil. So, I am disappointed, and the Opposition is disappointed also by the Government’s decision. I think I can truthfully say, from what I have heard from sectors in both fields, that the oil search companies are bitterly disappointed, too. I do not think Senator Spooner will deny that the leaders of those companies have been very vocal in the press. Unfortunately, but typically of the Government, it has called a halt to the tempo of the search for oil at the very time when the tempo was quickening. The Government has thereby given a setback to progress in what unquestionably is one of the most important interests in this country.

May 1 say a word or two about migration, another matter of great importance to Australia. The Treasurer (Mr. Harold Holt) stated in his Budget speech that the migration target is still 125,000 a year. Yet, when we consider the first six months of this year we find that net migration, according to the Statistician - I looked at the figures to-day - is running at the rate of about 48,000 increase this calendar year. That will be the position if the next six months are like the first six months of this calendar year. Why talk about a target of 125,000 as though that were being achieved, or even being nearly achieved? It is not, and it will not be achieved until we restore employment and until there is more activity in the housing of migrants. The chief difficulty is that we have so much unemployment, most of which is among our new Australians, who have more difficulty in finding work than do nativeborn Australians, if only because of language problems. Many of the migrants are going back to their own countries. It is a tragedy that in the handling of the economy by the Government we should have dropped from the high level of immigration we were enjoying.

Let me say a word or two on the question of social services. There is no provision for them in the Budget. The Government points to a degree of stability in costs. It says that social service beneficiaries can wait, because of the stability in prices and costs. Let us apply that argument to child endowment. The rate of 10s. a week for second and subsequent children has not been changed since 1948. For the past thirteen years or so that this Government has been in office it has left child endowment completely unchanged. I suppose on a true assessment that the amount paid is worth considerably less than half its nominal value. Certainly the Government gave 5s. for the first child back in 1950- but that has stood for twelve years while inflation has raged. How unjust it has been for the family unit down all those years that those two great elements, designed to assist the family, should have the value stream out of them with no activity on the part of the Government.

There is no answer to the charge that the Government has been callous and indifferent to the family unit in that regard.

I know that once given child endowment cannot be withdrawn next year, that it continues on a permanent basis; but, having regard to the stagnation about us in the economy to-day, what a wonderful stimulus it would have been to business activity to put more spending power in the hands of the mothers. The money is badly needed for their children. They might be able to buy a little more of the food of which, according to the Commonwealth Statistician they are not now buying so much. In addition, child endowment is money with the highest velocity of circulation. It is spent immediately and not hoarded. It is spent on the children by the mothers of the nation. It is turned over and over, through the retailers to the wholesalers, to the producers of material. It has an extraordinarily quick revolution right through the community. There is no quicker way of livening up the economy than to make a payment like that. I know that once given it has to be maintained year after year, but we charge the Government with callousness and injustice in that regard. The position is the same in regard to social service benefits generally.

Senator Vincent:

– Would you agree that prices and costs have been stable?

Senator McKENNA:

– I propose to say something about that in a moment. Before I reach that point I want to say something about the deficit. I have already indicated that what was a sin in June, 1961, according to the Government, is now a virtue. The Government has lifted the figure of £100,000,000 proposed by the Labour Party to £118,000,000, adopted the idea as its own, and presented a Budget with a deficit of that order. How does deficit budgeting in this case arise? I think the Senate will recall that it has heard me on this theme down many years. The Government of this country, in normal conditions, can rely year after year upon the natural expansion of the economy, without any increase in rates of income tax or other taxes, to provide an additional £100,000,000. The amount has been higher than that, year after year. On many occasions I have put the exact figures before the Senate, and submitted them to Treasury scrutiny and check. What do we find this time? We find that revenue has been almost static in the last two years.

There has been very little change. Natural expansion of the economy has gone. There is stagnation. The required amount has to be made up by deficit financing. The failure of revenue, due to a slump, to expand in the normal way, makes this deficit Budget necessary.

In the matter of expenditure, it is extraordinary that this Budget is supposed to give a stimulus, but the truth is that the increase in expenditure proposed is the lowest for quite a large number of years. It runs at from £70,000,000 to £80,000,000 for the current year. Most of that is inescapable expenditure. An amount of more than £20,000,000 relates to social services and repatriation. That increase is required, not because of any increase in rates, but just because new beneficiaries are coming into the field. Part of the increase is due to augmented grants to the States for income tax reimbursements, not deliberately decided by the Government but determined under a formula, on a five years’ agreement. Those are the elements that make for the bulk of the increased expenditure. They are not new stimuli thought up by the Government. They are inescapable commitments that had to be met, whether or not a budget deficit was announced. The Government had the alternative of meeting them by higher taxation. It has chosen a deficit.

We come down to the few relatively footling increases in capital expenditure with which I dealt earlier in my speech. The Government relies upon them for the stimuli. Those are the amounts to be disbursed under State grants - extra bits and pieces all over Australia to promote small sections of development. The third factor which creates the need for a deficit budget is that after a very good year in the loan market - last year was the best year since this Government has been in office, really the only year in which it has been successful - the Government realises that this year it will not be so successful and expects that it will raise about £35,000,000 less than it needs.

So the need for the deficit does not arise because the Government is going out, with confidence, putting money in the hands of the people so that they may spend. This is a Government which has inescapable ex penditure, whose revenues have failed because of a slump in the past year or two, because of stagnation in the economy, and because after one burst the loan market is expected to revert to its old form and not yield enough money. So the deficit is looked upon by the Opposition as not giving a really positive stimulus to the economy. It is merely to hold the economy in its present stagnant position.

Senator Hannaford:

– Your loan predictions last year went astray, did they not?

Senator McKENNA:

– I did not realise the depth of the stagnation into which the Government was steering the country, if I did make any prediction. The Treasurer gave the reason why loans were filled last year. The demand for bank overdrafts was so poor that the banks had excess liquidity which they put into loans.

Senator Hannaford:

– It is something that you said we would never do.

Senator McKENNA:

– The loans were filled, but only by the banks, as the Treasurer said. Because of the stagnancy in the community, the people would not use the bank funds that were available to them. He forgot to add the other reason, namely that insurance companies and superannuation funds were seeking to get the benefit of taxation concessions under the new system of incentives and disincentives. They were re-arranging their portfolios to qualify for taxation concessions. The Treasurer forgot to mention that. Those were the facts that led to an improvement. It is obvious that we are again going back. The Treasurer asserts that loan raisings will be down £35,000,000 this year.

I promised Senator Vincent that I would say something of inflation and the stability that has been achieved. I agree that inflation is a danger that must always be watched. I see elements in the huge savings of the people that could lead to it. It is true that the great bank liquidity still exists to a considerable degree. This liquidity could mount pressures that would grow, and these need to be watched. The fault of the Government in relation to that matter is that it is afraid of a boom; it is afraid of inflation; and it cannot handle the problem until it is prepared to seek proper economic powers from the people. It is of no use for the Government to try to control one small sector of credit within the control of the banks and representing about 25 per cent, of the total credit, and to let the rest run entirely free. If the Government were earnest, it would have an easy method of controlling the finance companies and hire-purchase companies that can so readily lead Australia into a spiral of costs and an orgy of spending. The Government itself set the pattern. Why does it not say to those bodies, “ If you care to register under the 1945 Banking Act as a bank, which in fact you really are, you will have the advantage of being allowed to continue to claim deductions in respect of your interest on loans that you raise, but if you do not register and bring yourself under the control of the Reserve Bank of Australia, your deductions in respect of interest will be disallowed “. A similar provision introduced by the Government and applied to the hirepurchase companies a little while ago was most effective. Is it not improper for a government charged with the responsibility of safeguarding the economy of the nation to let three-quarters of the country’s credit run right outside its purview - right outside the control of the Reserve Bank of Australia?

One must concede there are dangers in the situation. A government that is willing to face these dangers, one that is not stagnant in its thinking, could take effective measures to avert them. Yes, at long last, after thirteen long weary years that have wreaked tremendous hardship on the people of Australia, we have reached a degree of stability in costs. I hope we can hold it. I hope the Government will see the steps that ought to be taken to ensure that costs will not get loose again.

Senator Vincent:

– Do you not attribute that situation to the actions of the Government?

Senator McKENNA:

– No, I do not. Though we have reached a better position in the balance of overseas payments this year, with a deficit down to £8,000,000 as against £369,000,000 last year, this has been achieved at the expense of unemployment. Our argument is that this Government has continually failed to preserve a proper balance between overseas payments and the level of employment. It has chosen between stability in our balance of overseas payments and unemployment, and has decided in favour of unemployment. From the viewpoint of human considerations it has made the wrong choice.

In case some Government member asks what Labour would do, let me refer honorable senators to the magnificent forwardlooking speech made by Mr. Whitlam, our leader in another place, last night. He intimated that if Labour were re-writing this Budget, the deficit would be £160,000,000, a sum that would give a real stimulus to the economy. The child endowment problem would be dealt with. An emergency grant would be made to the States for education. We would preserve the 5 per cent, income tax cut, but would re-arrange it on a just basis so that those people on lower incomes would get a bigger benefit. We would rewrite the rates in relation to that matter. Mr. Whitlam suggested a lower long term yield on bonds, the idea being to reduce interest for the whole community. Above all, he proposed a progressive five-year plan for the development of this country, not only by the public sector through governments, but also in close association with the private sector so that there would be leadership and the people could have a spirit of confidence and see where they were going for a reasonable period. In other words, he promised a complete reversal of the stop-go policies of the past few years.

I conclude by referring to that part of the Treasurer’s speech dealing with stability. He said -

To me, stability means three things, all related to and dependent on one another - steady growth, a balance between current supply and demand and stable costs and prices.

Of those three elements, I have said something of stable costs and prices. Let us look at the other two. Where is the steady growth? In the light of all the factors I have put about the national income and other factors - the steady growth, the constant fall in our national income and in investment in private industrial activity, the falling off in farm income and other elements I put earlier - where is the steady growth? There is stagnation. We have stood still for two years. Let us look at the preservation of balance between current supply and demand and at the unused industrial capacity in Australia to-day. Let us consider the 90,000 unemployed people waiting to be absorbed in industry. Let us consider also the bank liquidity, the vast savings. All that is necessary is intelligent planning and arrangement to bring those elements together, to bring current supply and demand into the proper perspective.

This Government has all the ingredients at hand - the unemployed, unused industrial capacity and ample money - but it has not the skill to bring them together. OE the three elements of stability postulated by the Treasurer in his speech, perhaps the second is the nearest to achievement. He is completely wide in respect of steady growth; there is stagnation. It seems to me that the economy is stagnant because the mind of the Government is stagnant and unprogressive. I believe the people of Australia now understand this themselves and would welcome the earliest opportunity to deal with this Government which, after thirteen years in office, has left Australia in this plight.

Senator SPOONER:
New South WalesVicePresident of the Executive Council and Minister for National Development · LP

– The Leader of the Opposition in the Senate (Senator McKenna) has devoted himself to the task of attacking the Government’s Budget. That is his responsibility and his task. I must say he applied himself to the task most energetically, though, if I may add, most unsuccessfully. Of the various adjectives he used to describe the Budget and the Government, I propose to deal only with the ones that seemed to be the keynotes of his theme song - the words “ stagnant “ and “ stagnation “. I propose to take up that challenge and to ask the Senate to take a quiet look with me at some of the things that have happened in Australia since we considered the last Budget, that is, twelve months ago, and the progress that has been made in that period.

If honorable senators approach what I say in a reasonably fair manner, they will be forced to the conclusion that the available information completely falsifies the picture that Senator McKenna attempted to paint of the events of the past twelve months and the present Budget. Let me quote a few facts. During this last year, the work force of Australia has increased by 94,000 people from 4,100,000 odd to 4,200,000. During the last twelve months, no less than 94,000 additional people have been found employment in Australia! The last survey conducted by the Department of Labour and National Service discloses that at the end of May, 29.8 per cent, of those people were working overtime as compared with 21.7 per cent, in May 1962. The unemployment figures show methodical reductions month after month. In May, 1961, the number registered for employment was 102,500. In May, 1962, it was 93,000, and by June, 1962, it dropped to 90,000. We are now in a situation in which only 2.1 per cent, of the Australian work force is registered for employment We have now reached the stage at which it is well known that skilled labour in many areas of the Commonwealth is becoming scarce.

Let us now look at what has happened in connexion with the average wages earned by those people who are in employment. The average weekly earnings per employed male for the March quarter of 1960 were £20 7s. lOd. By the March quarter of 1961 they had increased to £21 6s. 9d., and by the March quarter of 1962 they jumped to £22 4s. Id. So there has been a very appreciable increase in the total number of people in employment in Australia, a very appreciable decrease in the number of people registered for employment in Australia and a very appreciable increase in the average weekly earnings of those who are in employment in Australia. That is very different from the picture of stagnation which Senator McKenna attempted to paint.

Now let us look at what has happened in connexion with the savings of the people of Australia. There has been an increase of no less than £157,000,000 in the deposits of Australians in Australian savings banks, and there have been no fewer than 525,000 new accounts opened by Australians in savings banks in Australia during the last twelve months. Is that stagnation? Is that the picture of a sick economy? On the contrary, is it not the picture of a good, developing, strong national economy?

Let us now look at what happened in the building industry, the great indicator. In the June quarter of 1961, £52,500,000 worth of industrial building approvals were granted. Twelve months later, that figure had increased by over £5,000,000 to £57,300,000. Now let us look at the actual commencements alongside the approvals.

The latest figures available are for the March quarter, and they disclose that the actual commencements in the March quarter of 1962 total £67,000,000 as against £57,900,000 for the March quarter of 1961, an increase of almost £10,000,000.

I do not pretend that the Government is perfect, but when we look at the progress and development that have taken place in Australia in the last twelve months, we find that nothing occurred in which every Australian is not justified in taking great pride and satisfaction. I do not propose to go on quoting statistics, but I shall make a few more general statements. Over the past twelve months, there have been great increases in wool production, in meat production, in milk production and in butter and cheese production. The production of minerals in 1962 was an all-time record of £247,000,000. I emphasize that the figures that I have cited have not been specially selected by me. They are the important figures, but I have not picked some figures that are good and left out others that are not so good. They are typical of all other statistics, and typical of what is happening throughout the whole of Australia. In the face of figures like that, any one who attempts to take a pessimistic view of where Australia stands to-day and where she is going to-morrow is simply getting things out of perspective.

The Opposition is concentrating on what has happened during the last twelve months. What I have related is the story of consistent progress throughout the whole twelve years life of the Menzies Administration. In every year there has been progress, in every year there has been an increase in population, in every year there has been added national wealth, and in every year there have been added employment opportunities. Some years have been better than others, but all twelve of them have been good years in the history of Australia, and I say that this progress will be continued during the next year.

It is customary for the Opposition to attempt to evolve a name for each budget brought down by this Government, to attempt to attach to the budget a name that will bring it into discredit, but I submit to the Senate to-night that the only really fair description that can be given of this Budget is that it is a budget of national develop ment. Senator McKenna mentioned a list of works being done throughout Australia, and referred to it as a comparatively small list. Amongst those works are some of the greatest projects that have been approached in Australia. They are great national development projects. Not only do they provide for employment - of course they provide for employment - but they also provide for balanced development throughout Australia, the decentralization of population into outlying areas and, what is even more important than that, they provide the basis for added export income for Australia. I repeat that the only name that can be fairly applied to this Budget is “ Development Budget “.

I could go on quoting specific instances such as those I have mentioned, but I should like now to step back a bit, as it were, to examine this Budget and the results that have been achieved over the last twelve months in the broad perspective so that we may have a better picture of the position. Budget time is, of course, a time of national stocktaking. It is the time at which the Parliament and the nation take stock of what has happened in the past and what will happen in the future and, having regard to the circumstances obtaining at the time, the Government must adopt certain criteria upon which to base its conclusions and make its judgments. I suggest that in the circumstances confronting Australia at the moment, the first criterion at which we should look is the strength of our international finances. Have we abroad sufficient funds to purchase the goods that we need to bring from abroad in order to maintain the rate of progress and the rate of development that have been features of the Australian scene since the Menzies Administration came into office? Unless we are in a strong financial position overseas, our growth and development can well be checked.

The second point ranking in importance is the cost structure. During the year, have we as a nation avoided those inflationary trends which would make the cost of the goods that we have to sell overseas so high as to make them unsaleable in the fiercely competitive markets of the world, and have we been able to contain costs and reduce inflationary pressures for the benefit of the substantial proportion of the Australian community which always suffers hardship in an inflationary period?

The third criterion is: What has been the rate of national progress and the standard of living within Australia as distinct from our international transactions? What are the likely future trends in Australia? Those are three basic questions to which every thinking person, reviewing national affairs at this stock-taking time, should devote his thoughts and attention. This Budget gives the Australian people the best possible answers to those questions. They are questions of great importance to which excellent answers are given.

Let me take the first one. There is always some one who complains and says that we are not doing well enough. Australia is a nation, thank God, of most optimistic people. We always want to see progress. We are a young nation in a great hurry. But we always have to make certain that we have our basic principles correct and our economic, commercial, trading and industrial affairs on a sound foundation. Surely members of the Opposition should be the first to admit that the financial year that ended recently was one of the happiest years, industrially, in Australia’s history. I was unable to find statistics to prove this point; but 1 believe it is true that the amount of time lost through industrial disputes in the last twelve months was very small. The picture was very good because of the industrial conditions that obtained. I have digressed. I go back to the three points that I have said are of basic importance.

The first need is to strengthen and develop the variety of our overseas transactions. In every month of the financial year 1961-62 our exports exceeded our imports. In total, exports were no less than £188,000,000 more than imports. The year closed with Australia in the extraordinarily strong financial position of having overseas reserves totalling no less than £561,000,000, after repaying the £78,000,000 that we borrowed temporarily from the International Monetary Fund. Throughout that year and the preceding years the Government has been directing its activities to the important task of increasing exports by means of tax concessions, trade missions to overseas coun tries, the Trade Commissioner Service and special publicity, and we are succeeding. Against that background, what right has Senator McKenna to describe last year as a period of stagnation? It was a year in which every month our exports exceeded our imports and which we finished in an extraordinarily strong financial position.

I come now to the second great point, that is the movement of costs within Australia. Senator McKenna, being the good tactician that he is, left this point until the end of his speech and made only passing reference to it. What are the facts? Let us look at the movement of the wholesale price index and the consumer price index. These are the criteria by which we judge the movement of costs in Australia. The wholesale price index was 356 in May, 1961, 333 in April, 1962, and 334 in May, 1962. The consumer price index was 125 for the June quarter of 1961, 124 for the March quarter of 1962 and 124 for the June quarter of 1962. I am trying to say this in terms as simple and yet as strong as I can put it to the Senate. It is very difficult to over-emphasize the importance of being able to contain our internal costs in the fiercely competitive world in which Australia is trading. Without doubt, the world will become more fiercely competitive in the future. It is also very difficult to over-emphasize the importance of the maintenance of our internal cost level to our standards of living.

A great number of people always like to see a nice little bit of inflation; but we have to remember that the maintenance of costs, as the Menzies Government has been able to maintain them during the last twelve months, has been perhaps the greatest single boon to the great majority of the Australian people - those on fixed incomes, including pensioners. They have had the great benefit of costs being maintained at a reasonable level for the whole of the year. That is one of the great foundations on which we can successfully build a nation. I hope I have dealt effectively with those two great points - our export-earning capacity and our internal cost structure.

The third great point is: How is all this affecting the rate of progress and development and the standards of living in Australia? I have referred already to the tremendous increase in savings banks deposits. Surely that is good evidence of prosperity. I have referred to the way in which average weekly earnings have increased. I shall now give some more illustrations. In Australia we are building homes at the rate of 84,000 to 85,000 a year and building costs are being contained. Costs are not booming and land values are not going beyond reasonable limits. Those o5,000 houses a year are more than sufficient to meet the normal annual demand. In the last quarter of the last financial year, commencements and approvals were substantially higher than in the corresponding period of the previous year.

We heard from Senator McKenna a bit of sob-stuff about food purchases falling. The answer to his claim is in the increased savings bank deposits. Food purchases are not falling because of a lack of prosperity, but because prices are more stable than they were previously. Senator McKenna spoke about criticism from retail traders. The value of retail sales in the last quarter of 1961-62 was £7 1 0,000,000- far above the figure of £685,000,000 in the corresponding quarter of the previous year. All these increases are spread throughout the whole community.

Secondary production increased in comparison with the previous year. The production of pig-iron increased by 10 per cent., electricity by 9i per cent., floor coverings by 43 per cent, and refrigerators by 50 per cent, in the June quarter of the last financial year, in comparison with the June quarter of the previous year. In June, 1962, motor vehicle registrations were 28,000, compared with 18,400 in June, last year.

I repeat that I have not picked out only the favorable figures. I challenge members of the Opposition to come forward in this debate and provide reasonable evidence that in the last quarter of 1961-62 overall Australian production was not higher than in the corresponding quarter of 1960-61. I agree with one thing that Senator McKenna said, namely, that it is necessary for us to maintain a rate of progress and development equal to or even somewhat better than that which we attained during the last financial year. Nationally we are committing ourselves to a £125,000,000 immigration programme. In other words, we are committing ourselves to an increase of Australia’s population at the rate of 2i per cent, per annum. We can take great pride in the fact that this has now been the rate of population growth for a very long period. We have shown an increase of 50 per cent, in population over the last twenty years. I suggest there are few countries that have been able to main- tain growth of population at the rate of 2i per cent, per annum for such a long time.

Senator McKenna made great play about the various changes we have made in our budgetary arrangements and our economic policy The simple answer is that the proof of the pudding is in the eating. It is all very well to talk in terms of stagnation and unused productive capacity. It is all very well to say that we should have done better than we have; but we have done very well in terms of development and progress during the last twelve months. Apprehensions have been expressed as to what might be the level of unemployment in the future. I put this point of view to you: It is not yet clear that all we did in February has had its full effect on the community. I do not propose to go through that February programme. It was a massive one which has shown results month after month. Let us see what happens over the next few months before we express hasty judgment about it.

Senator McKenna criticized the fact that no increase had been made in social service benefits in this Budget. There are always two sides to every coin. Let us look at the other side of the coin. It shows that payments from the National Welfare Fund to Australians will be no less than £387,600,000, an increase of £22,400,000 over last year’s payment. Let us take the further point that those payments this year will absorb no less than 72 per cent, of the total amount collected in income tax from Australian taxpayers during the year. In a time when we are budgeting for a deficit and when costs have been stable, when the Government’s record is that year after year it has added additional social service payments and made added provision for those who are qualified to receive social service benefits, surely it is not unreasonable, to say the least, to halt our activities and develop in other directions. I have expressed the view, and I repeat it, that there has not previously been a budget which has emphasized national development to a greater extent and in a sounder way than this one. This will continue in the future. We are aiming at providing further for these developmental programmes with three big broad objectives in mind.

The first objective is to provide a basis for greater export income. Our hopes of development in the future are going to be largely influenced by how we increase our export trade. We are aiming also at the development of northern Australia and seeking to provide more employment. In northern Australia the policy that has been patiently adopted for some time past is now commencing to pay off. It has been our task over a number of years to find basic resources - to help those who are mining and surveying in the search for basic resources. We have helped them to find and to develop those resources. We now have a string of enterprises across the north of Australia which indicate progress greater than was expected a few years ago - bauxite at Weipa, uranium, iron ore, the Ord River Dam in the Northern Territory and iron ore in Western Australia. There is a string of enterprises showing development in the north of Australia to an extent that no Australian really would have thought possible ten years ago. The last census shows the increase in population north of the Tropic of Capricorn. Population there has increased by no less than 22 per cent, in comparison with a population increase of 17 per cent, for the rest of Australia. This is reflected in the population of the towns. Townsville’s population has increased from 40,471 to 50,731; Mount Isa’s from 7,433 to 13,315; Darwin, with a population now of 12,458 has almost doubled the population of 1954.

This is a hard task that confronts us. It is difficult to get the north of Australia developed and to develop it on a basis that will continue. We want to get a sound and solid foundation.

In the last few minutes available to me I turn to Senator McKenna’s criticism of oil surveys. It is not often that I venture to laugh at Senator McKenna, but one of the most laughable things was his claim that it was only his stirring up of the Government that made us active in our search for oil. I have a good sense of humour, but I take my mind back to when I took over the National Development portfolio. Then I saw what the Labour Party had not done in the search for oil in Australia. The whole search for oil dates from the coming to office of the Menzies Government. The Labour Party has nothing to boast about in the search for oil. To have it said that what we have done has been done as a result of a stirring up by the Opposition is one thing about which I might be pardoned for getting a little hot under the collar.

Let us look at Government expenditure on the search for oil. It rose from £2,300,000 to £6,600,000 in the last three years. The search for oil in Australia is now properly launched in the proper way. Years of basic survey has been done by the Bureau of Mineral Resources. There has been encouragement provided for people to go about the task in the right way. We have gained experience. It is not a case of a subsidy for drilling only, but for the basic geophysical and geological work which presents in a scientific way the targets that should be drilled. We have subsidized the drilling work to the extent that the search has been successful. There is not the slightest doubt there will be further success as time goes by. Of course the companies complain because the subsidies have been reduced, but where else in the world can companies search for oil while getting the benefit of a 30 per cent, subsidy from the Government, plus most generous income tax concessions. Of course they complain, but we as the persons responsible have to determine whether they have justification for their complaint. Are we not doing a reasonable thing when we double in a year the amount which we are spending as a government through our own department? Is that not a fair contribution to the search for oil? What right have the companies to complain if we do that? At the same time, what we have aimed at has proved, at least to an appreciable extent, successful. Can the companies complain if we do not continue subsidies at the high rate that was previously available? I hope I have convinced the Opposition of the soundness of my views and I hope that a result of what I have said they will withdraw this amendment and support the Budget in the same forthright way as I propose to do.

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

– As I commence my speech on this year’s Budget I think I should make a general appraisal of it. At least it is not a political budget. No government could bring down a budget such as this and expect to win an election. I am pleased to see that the Government expects to stay in office for its full term of three years because by bringing down a budget such as this it demonstrates that it is not worried about going before the electors this year. In view of the things that are missing from the Budget the Government would get a rather warm reception if it were to go to the electors in the near future.

As in the case of last year’s Budget the Government is depending greatly on development and expansion. The Minister for National Development (Senator Spooner) to-night gave an indication of the development projects that are planned, and the expansion that we can expect, in Australia in the next twelve months, and we hope thereafter. The theme of his speech was development and expansion. Listening to him one would be inclined to say that the Budget is a very good one, but when dealing with the expenditure of a country the important thing is to put the emphasis in the right place. The Minister for National Development (Senator Spooner) has attempted to prove that the Budget is an excellent one because it fulfils the objective of the Government, which is to develop Australia. That is very important, but as I said, in a matter such as this the important thing is where the emphasis should be placed. I do not think it should be placed so much on expansion. That is very important but it is subsidiary. I believe the emphasis should be placed on the defence of this country and on looking after the family man - the person who is the backbone of the country. In not doing so, I think this Budget has failed badly.

Still speaking in a general sense, I say that this is a simple budget. There will be very little follow-up legislation. If any honorable senator wishes to criticize the

Government in the social service field he will have to do so during the Budget debate as there will be no follow-up social service legislation. No taxation proposals will be brought forward and there will be no new health or repatriation benefits. This is the only Budget I can remember that has not provided any benefits to the ordinary person. Even during the war budgets always gave some solace to some persons in the community.

Senator Branson:

– Have not costs been held?

Senator COLE:

– It is a very good thing that costs have been held. It is all right for me because I receive a good salary. I do not get any extra for being the leader of a party either. It is all right for me but it is not all right for a man who is receiving £17 or £18 a week, and has to keep a wife and several children. It is not good for him. It is good in the sense that money will buy as much this year as it did last year, but it is not buying sufficient at the present time for the needs of a family. It is up to this Government to do all it possibly can to see that the standard of living of the family man is raised.

I have said some reasonably good things about the Budget but I shall now emphasize some of the failures of the Budget. It has failed in the social service field. Everybody realizes that, even though he is pleased that prices have been held and that that is going to be of great benefit to pensioners and people in receipt of social service benefits. But the Budget has failed because it does not give to people in receipt of social services the standard of living which they should have. I believe, however, that the greatest failure of the Budget is in respect of the defence vote. Do we realize the dangers to which this country is exposed? I do not believe we do. Do we realize as a nation the dangers of communism, both inside and outside of this country? I do not think we do.

If we are aware of these dangers we are very lax in not preparing ourselves to fight them inside the country, and in not preparing ourselves to safeguard the nation from any aggression that might come from outside. That failure, Mr. President, is, I believe, the greatest failure of this Budget. The Government has not provided sufficient money for the defence of this country in a time of need. I know that development will help us hold Australia. That has been the keynote of the Minister’s speech to-night. But we must provide for our defence right at this moment in order to safeguard the people.

I should like to deal first with the subject of social services. As I said no increase has been made in social service benefits in this Budget. I am sure that everybody was looking forward to an increase in child endowment. There seemed to be an idea that the Government at least would appreciate the tribulations of the family man and that this Budget would be designed to help him by means of a graduated increase of child endowment, but that has not happened. If there is one way in which we can overcome, shall I say, our wage tribunals, which make no greater provision for the needs of a man with a wife and children than for a single man, it is by means of child endowment payments. When the tribunals fix wages they do so according to the needs of the single man.

We must see to it that sufficient moneys are provided from the community funds of Australia to help the people who have the greatest responsibilities, namely, the family men. The need for such help to be given has been overlooked by the Government in this Budget. I believe that even the supporters of the Government thought that something would be done in that connexion. We of the Democratic Labour Party say that child endowment should be increased, if only to restore to it the value that it had in past years, by raising the payment of 10s. a week for the second child to £1 a week, and the payment for subsequent children up to the fourth child also to £1 a week. The person who has a large family has greater responsibilities than the one with a small family. Accordingly, we think that the amount of child endowment should increase by half-a-crown a week for all children after the fourth child. In that way we could help the people to enjoy a better standard of living. After all, the people are working to improve their standard of living. They do not work merely to exist, or to make profits for those engaged in big business. As a parliament, we should be helping them to improve their standard of living. We are taking from the national income money that could rightly be given to the people.

No provision has been made in the Budget for additional assistance to be given to pensioners. I know that this Government has done a really good job so far as pensions are concerned, especially in amalgamating, for means test purposes, the amount of money which a person has in the bank and the property he owns. That has been of quite substantial assistance.

Senator Laught:

– The merged means test.

Senator COLE:

– Yes. While that has been of considerable help, not sufficient money has been given to the old people who have developed this country. They are not receiving sufficient from the national income to live a life of reasonable luxury. There is no reason why they should not live such a life. They should have the opportunity to end their lives in peace and happiness. We are not giving them the standard of living that this country could afford. That is why, in all the previous budget debates in which I have participated, I have asked for tribunals to be established so that a really true appreciation, based on a thoughtful analysis by experts, might be made of the amount of money that should be given to pensioners from our national income.

Senator Kendall:

– They would be getting the basic wage if they got any more.

Senator COLE:

– No, they would not. I would not mind if they were given the basic wage, because the basic wage, after all, is only the bare minimum on which a man and his wife and one child are supposed to exist. Even though a person might not have been sufficiently fortunate to save, I think he would have earned his keep for the last few years of his life.

I turn to medical benefits. In this respect there is a point that I wish to bring to the notice of the Minister for Health (Senator Wade). I refer to an anomaly that should be corrected straight away. A person who is in receipt of the full amount of pension and has superannuation of £208 a year is given a medical card and is entitled to full hospital and pharmaceutical benefits, but if his superannuation is more than £208 a year he is not entitled to the medical card, although he still may draw the full pension. To an old person, that is a very serious matter. A short time ago we in this Parliament increased the value of the superannuation unit. Most public servants contribute for the number of units of superannuation to which they are entitled, and most would be eligible for a pension of more than £208 a year. I refer particularly to railway employees. The value of the relevant number of units has now increased to more than £208 a year. I understand that it is approximately £227, which deprives them of their right to a medical card. The Government, or the Department of Health, apparently saw that there would be difficulties and decided not to take away the medical cards of those persons who already had them before the value of the superannuation unit was increased. However, persons who now become eligible for a superanuation pension of £227 are not entitled to medical cards. I believe that the law will have to be changed in this respect. It would not be very difficult for the Government to bring in amending legislation to overcome this very grave anomaly. I hope that the Minister for Health will make a note of the matter and see whether something cannot be done along the lines I have suggested.

The subject of unemployment has been mentioned here to-night. That is always a grave matter in any country. I am pleased that the Government is reducing the unemployment figure, but when we think of what could be done in the way of development with the vast man-power that is now being wasted it is rather tragic. We are spending £15,000,000 a year on unemployment benefit. That is more than the amount that was given to the States by the Government in February to relieve unemployment. We are losing money in two ways. First, we are losing it by giving it out without any return and, secondly, we are losing it because the men who are out of work have lost their earning capacity. The Government, in its attempt to hold back prices and to stop inflation, has been mistaken all the way through. Inflation has stopped, because men who have been withdrawn from employment have not the money to put into the economy. I do not know whether or not the Government has acted deliberately, but it has been stopping the employment of these men, indirectly in some cases and directly im others. That is not only inhumane; it is also a tremendous waste of man-power and effort. We need that man-power and effort to develop Australia so that we may hold it for the future.

The Government is a little frightened of inflation. That is a wrong outlook. If this were an old, settled country with a stable population, inflation would be bad, but we cannot develop to the full a new country like ours, with tremendous possibilities, without an inflationary spiral. If a rich gold mine is established in a district, there will be an inflationary spiral in that district. If oil is found in Queensland in very substantial quantities, an inflationary spiral will result. The whole of Australia is ready for the tremendous expansion that we must have if we are to hold it. There must be a certain amount of inflation in the economy. To stop it is to stop progress.

Senator Cormack:

– What about the erosion of savings?

Senator COLE:

– I do not think savings come into it.

Senator Cormack:

– If you hold a few government bonds, you will find out.

Senator COLE:

– A very interesting booklet on banking has been issued. It is not the savings in the bank that are important; it is the credit that arises from having the savings in the bank. When a bank has a deposit of £1,000, it may lend up to four times that amount. If we want to spur development a little, why do we not abolish pay-roll tax? That is hindering development. Municipalities borrow and spend huge sums of money but the. Government is taking a fair percentage in pay-roll tax. That seems a ridiculous state of affairs.

TASMANIA · IND; AP from Aug. 1969; IND from Jan. 1970

– And it reduces competitive exports, too.

Senator COLE:

– That is a point that should be noted. I know that some Government senators would like to see payroll tax abolished. They should speak up in their various committees and ensure that the Government does something to spur development by getting rid of pay-roll tax.

Senator Marriott:

– Are you not advocating that the Government should receive less and pay out more?

Senator COLE:

– Whenever we make proposals in relation to social services and other matters people ask, “ Where is the money to come from? “ If money is put into the economy by giving it to somebody to spend, that money goes from one shop to another, and then to another. In the process the Government receives back, I suppose, as much as it pays out. That happens throughout the field of social service benefits.

There is another matter about which the Government is very lax and is causing great concern to many people. I refer to immigration. Australia cannot be developed or defended unless we have a vigorous immigration scheme. The Government has budgeted for 125,000 new immigrants in twelve months, but last year we received only 67,000. We cannot expect to hold this country if that number is all we receive every year. The Government does not seem to be forcing the issue. It is not encouraging people to come here. That is a mistake, and I should like to put forward a programme that should help the Government.

We view with alarm the slowing down of the immigration programme and point out that Australia’s national development, future prosperity and survival, are dependent upon a courageous immigration programme. We warn that Australia will in future have to compete with many other countries for prospective migrants and we cannot expect a strong flow of newcomers unless we go after them. We therefore advise the Government to step up its immigration programme in order to ensure the maximum possible intake of migrants in the years ahead. The Government should take immediate steps to promote increased migration by establishing the right and opportunity of full employment for all people. It should offer increased assistance to unmarried women migrants in order to adjust the imbalance of the sexes already existing. There should be a removal of restrictions preventing the completion of family groups.

The Government should make positive attempts to compete with the higher standards now prevailing in most European countries. It should take steps to obtain more migrants from American and South American countries. It should make a more humane approach to genuine political refugees from all countries and the right to apply for citizenship should be available to all persons after five years’ residence. Asian employees admitted to work in Asian or other businesses should have right of entry for their wives and children during their terms of employment in Australia. Migration is virtually the life-blood of this country. The Government, by some means or other, has allowed the rate of intake to slip back. Let us hope that the Government will do more to encourage migration.

I had hoped to see in the Budget an increased vote for education. The Government has done a wonderful thing in helping independent schools in its Territories. I thought that there might well have been a further increase in the amount provided, as about 4,000 children in the Australian Capital Territory go to independent schools. However, the amount provided will not be increased. Education is very, very important.

I want to see the ordinary State education of this country given every opportunity to expand. I want this Government, which has realized the need to a certain extent, to realize it a little more, so that the two streams of education - in independent schools and in our State system - can flow along happily and smoothly. It may be said that we have nothing to do with independent schools, but after reading the speech of a member of the other House I believe that section 96 of the Constitution could be used by this Government to implement this aid and to give justice to the independent schools in the States. That is, the States could be the agents of the Commonwealth Government when, and if, it provided money for such schemes. It is only a matter of justice. Many people are against aid for private or independent schools. It is time that the Australian people realized that as a matter of justice parents of children attending these schools should be given certain moneys to help in their education. We believe in the two streams of education, and there is no reason whatsoever why the States themselves, or the States with the help of the Commonwealth Government, should not help in this respect.

We know that at the present time certain families provide for the education of their children and also help to provide for the education of other people’s children. We say they should be given a certain percentage of the money set aside for education for the improvement of their own children’s education. We want those two streams to flow. Otherwise, what will we get? We shall get a nationalized system, and honorable senators know what happens under a nationalized system. It has happened in other countries, and we do not want it to happen here. So, justice for independent schools is a very important matter at this moment. We know that it costs an average of about £100 a year to educate a child. Out of that sum the children get the amenities and so on. All that is sought by people who desire to educate their children in a certain manner in certain schools is justice from this Government and this Parliament, through the education vote passed by this Parliament that goes to the States.

Finally, I want to deal with defence. I have already said that the prime importance of this Budget concerns providing the means whereby this country can be defended in the hour of need. In the past few years we have seen some glaring examples of our lack of defence. As I said, we have seen the rape of West New Guinea which is now going on. Perhaps it is the policy of the Government not to interfere, but I think that such a policy is Wrong. Certainly the Government has not interfered; maybe it could not. Are our defence forces sufficient even to safeguard this country, let alone for use in trying to help somebody else? Many statements have been made on this subject. It has been said that Australia could be invaded by a couple of thousand men. It is our object that the defence vote and the defence potential of Australia should be increased. Indeed, our defence potential should be doubled in the next three years. That is not asking too much, because there is so much at stake at this moment. It is easy to say that things will continue as they are for years, and to claim that the right thing has been done if nothing untoward happens, but we say that time is running out.

It is possible to stress different aspects of a budget. We stress firmly the need for certain policies, one of which is the increase of the defence potential of this country. World conditions to-day are very bad. As I said this afternoon, the Communist countries have set out to conquer the whole world. They will do so unless we are prepared to spend more money in the defence of Australia. The defence vote has not been increased for many years; it has merely fulfilled the function of maintaining present defences. We must do better than that. It is essential that in the next three years we double our defence potential.

Senator Kendall:

– You would not have money for developing anything else if you did that. What would you use for other development?

Senator COLE:

– There is the money angle again. I hope that Senator Kendall is not one of those who say that we should take the defence vote and use it for development. That is a very stupid outlook. Australia would be able to find money rapidly if it had to go to war. We must be prepared for war now.

The Budget is not a very successful one, though the points emphasized by the Treasurer seem to make it appear a good budget. We stress the need for adequate defence of this country and we emphasize that the family man should have been given at least some alleviation of his hardships. In our opinion the Government has not done this, and I believe this Budget to be a failure. If we had plenty of time we could say that it is a good housekeeping budget and will keep things on an even keel. Looking at it from our point of view I say that the Budget has failed in its approach to the objectives to which we look - the need for adequate finance to defend this country and to help the family man.

New South Wales

.- At the outset, let me say that I support the motion for the printing of the Estimates and Budget Papers and that I am completely in accord with the procedure for considering the Estimates which was adopted last year. The Leader of the Opposition (Senator McKenna) voiced his objection to the procedure but I am quite sure that the Senate as a whole is in favour of this method of debating the Budget and considering the Estimates.

I support the Budget. It is a commonsense Budget devoid of frills. It is a Budget designed for a continuance of sound economic development as distinct from handouts, dramatic, so-called shotinthearm measures, and all the mystical magic wand-waving methods that our friends of the Opposition so glibly espouse.

What do we want in Australia? Do we want a sound economy based on measures which will ensure stability and development? Or do we want a sudden splurge of easy money conditions leading to galloping inflation, rising costs and a devil-may-care attitude on the part of the individual and an atmosphere of “ do as little as you can for as much as you can get “? Despite what our critics may say, the unpopular measures which have been undertaken by the Government saved this country. By them we were able to remedy that condition which contained the germ of galloping inflation, and, surely every one realizes that, short of war, no greater calamity can overtake a country than galloping inflation. I very much regret that we have in our community to-day far too many people who apparently live only for to-day and have no thought for the future. Too many of our business people are looking for quick returns and high profits with the inevitable risks that go with them. The Government is playing its part, and it is now up to the business community to act in a similar manner.

I am very glad indeed to note that the primary producers’ organizations of New South Wales, with the good sense that we are accustomed to see in those organizations and that we have come to expect from them, have quickly realized the advantages provided for the primary producers by this Budget. The Government does not say, “We are going to give you this; we are going to give you that”, as our friends opposite would have done if they had been submitting the Budget. On the contrary, it says that the spiralling costs that have been the bugbear of our primary industries for the past Seven or eight years have been halted, and that is one of the greatest benefits that can accrue to our primary industries. I am glad that this was recognized very quickly by the leaders of the primary producers’ organization. In “The Land “, a primary producers’ publication, the opinions of two of the leaders are quoted. The president of the National

Farmers Union of Australia, Mr. A. F. Havard, is reported as having said -

Primary producers in common with all export industries would appreciate the Government’s concentration on preserving Australia’s cost stability and rejecting the temptation to use popular concessions to secure its political position.

That is quite a pat on the back for any government. The general president of the United Farmers and Woolgrowers Association of New South Wales, Mr. L. M. Ridd, is reported as having said that the primary producers had received the Budget with mixed feelings, but he later emphasized the point that Mr. Havard made, and which I have just quoted.

Senator McKenna said that some concessions should have been made to our families so that more food could be bought for the children. My gracious! Fancy anybody suggesting that the children in Australia are not getting enough to eat! I am dismayed indeed - and I use that word deliberately - to think that such a proposition would be put forward in these days. Let us consider the calories that the average family receives per day in Australia. I have quoted these figures before. In 1959-60 the average Australian family received 3,330 calories, while the average family in the United States of America received 3,100 calories. The figure for the United Kingdom was 3,300, for France 2,900, for Canada 3,150 and for Argentina 3,000 in that same year. Australia headed the list, yet we hear the sob story, “ Give the families more so the children can have more food”. I have never heard such a foolish argument!

Now let us look at what we were faced with before certain measures were taken by the Government some eighteen months ago. Some people have stressed the fact that there was a slump in the building trade. I point out that at that particular time the prices of houses and land had soared beyond the reach of most young people. First, they could not afford to buy a piece of land on which to build a home, and secondly, if they did manage to buy the land, they could not afford to build a home on it. Since then, there has been a reduction in the cost of building; indeed, the price of land has also come down.

Quite a number of land speculating real estate agents have burnt their fingers and land can now be bought at a more reasonable price, although it is still too high.

Senator Cole said that no concessions were being provided in the Budget for the people. He overlooks the fact that the rebate of ls. in the £1 on income tax is being continued. If that is not a concession I do not know what is. That will cost the Government quite a bit in the ensuing twelve months. It has already cost quite a large amount. The figure is given in the Treasurer’s Budget speech. I also remind Senator Cole that prices have been stabilized. That again represents a very important contribution. )

Now let us look at some of the proposals contained in the Budget. On my figures, we are faced with a total increase of something like £1.33,000,000 in expenditure this year. Senator Cole stated that we were not spending enough on defence. The increase for this year alone is over £6,900,000. The sum of £210,000,000 has been tentatively included in the Budget for expenditure on Defence Services in 1962-63. This represents an increase of £6,922,000.

I come now to the National Welfare Fund. Here again, although the per capita payments will not be increased, the total expenditure for this year is expected to increase by £22,383,000. Are we to increase the per capita payments year after year? If we were to do so, our economy would collapse in a very short time like a pack of cards. Last year, expenditure from the National Welfare Fund was costing us approximately £1,000,000 a day. This year it will be costing us more than that because it is estimated that the total expenditure for the year will reach £387,574,000, an increase of £22,383,000, as I mentioned earlier.

Next I come to age, invalid and widows’ pensions. Here again the payments are expected to rise by over £13,000,000. Yet we are told there has been no increase in social service benefits! In addition to that, payments for pharmaceutical benefits are expected to increase by at least £5,000,000. Goodness gracious! Where are we getting to? Can these costs continue to go up and up all the time even though the per capita payments are not increased? I am very glad indeed to find that in one item at least we expect a decrease in payments. I refer to the payment of unemployment and sickness benefits. These are expected to cost £3,000,000 less this year than in 1961-62. This is mainly because of the reduced unemployment figure, which it is to be hoped will be reduced still further this year. Payments from the National Welfare Fund have reached such huge proportions that we should take more serious notice of them.

War and repatriation expenditure will be £6,363,000 more this year than last year. It has been estimated at £110,701,000. In respect of this item the Treasurer said -

This item also makes a relatively large call on our budget resources. If estimated expenditure on war and service pensions and allowances, repatriation hospitals and other repatriation benefits are added to National Welfare Fund payments, total expenditures of these kinds would be equal to 91 per cent, of our estimated revenue from income tax on individuals in this financial year.

The next item is “ Other Special Appropriations”. Fortunately, in this instance there is a decrease of £4,332,000. The amount provided from Consolidated Revenue for payment in 1962-63 under the Wheat Industry Stabilization Act is £7,500,000, whereas last year the figure was £11,906,000. So, practically the whole of that decrease comes under the Wheat Industry Stabilization Act.

I remind the Senate once again, although some honorable senators may be heartily sick and tired of my reminders, that the Australian wheat-growers contributed to the Wheat Industry Stabilization Fund over the years. That meant that the consumers were able to buy bread more cheaply than would otherwise have been the case. Those contributions cost the Australian wheat-growers about £200,000,000. Last year payments under the Wheat Industry Stabilization Act cost the taxpayers £11,906,000. They are still in the debt of the wheat-growers to a very large extent. Let us keep that fact in mind and do not let us have any misapprehensions about it.

There is to be an increase of £8,637,000 in departmental expenditure. I have not had an opportunity to see how those increased expenditures come about; but as a former member of the Public Accounts Committee I can say with quite a lot of confidence that we can safely leave that item to that committee.

Under the heading “Business Undertakings “, a large sum of money is set down for ordinary services of the Post Office, involving an increase of £4,687,000 over the expenditure last year. I believe it must be admitted that the Post Office ranks with the best of the services that have increased in efficiency. When I had the privilege and pleasure of being in Perth a fortnight ago, I booked a telephone call to a place in the central west of New South Wales and scarcely had time to walk from the hotel office to my bedroom before the call was put through. It is a splendid service. I was able to hear very well. On another occasion I was able to make calls to the central west of New South Wales from the ship on which I was travelling, when we were in Melbourne and Adelaide. Although we growl about the cost of postage and telegrams - I suppose that is human nature - we must admit that the PostmasterGeneral’s Department gives us very good service.

I am glad to see that the expenditure on the Territories will be increased by £4,879,000. That increase is composed of an increase of £2,700,000 in the grant to the Papua and New Guinea Administration and a rise of £1,482,000 in expenditure in the Northern Territory. As I have said before, if I had my way, people living in the Northern Territory would live there taxfree. They are doing a service to Australia by developing that area. They are putting up with hardships that many of the people who live in the metropolitan areas and the closely settled parts of the inland would not countenance for a moment. My wish for these people is that they will be able to make sufficient money in a comparatively short time to enable them to leave, if they want to do so, and enjoy the amenities that are taken for granted by people living in our cities.

There is another large increase of £26,013,000 in payments to the States. This year the payments will reach the huge total of £422,575,000. Yet we hear the same parrot-like cry from the States year in and year out - “ We cannot get

F.6362/62.-J- flu] enough money from the Commonwealth Government “. This is one of the penalties of the uniform tax system. In spite of all the grizzles and growls that we hear from the States, not one of them would have this taxing power back even it if were offered on a gold plate. They know that they are on a good thing and they are sticking to it. To use a colloquialism, they are squealing like stuck pigs all the time and enjoying every minute of it.

Financial assistance grants are estimated tentatively at £305,290,000, an increase of £13,150,000 over last year’s grants. Yet the States say that the Commonwealth is not giving them enough money! This year the Commonwealth Aid Roads grants will be £54,000,000, which is £4,000,000 more than the grants made in 1961-62. Yet, from a reading of some newspaper reports, particularly those dealing with road transport, one would think that the States were not getting 2s. from the Commonwealth Government. The increase this year is in accordance with the agreement on roads grants which was arrived at some time ago and with which most’ of us are familiar. Under that agreement an increasing amount is paid to the States each year. One can see evidence of these grants if one likes to get away from the cities and travel about the country in the various States. One sees more and more sealed roads which reduce transport costs and help, in a very big way, to develop this country. Let me emphasize that I am not referring to the beef roads in the far-flung areas.

Assistance for universities will rise by £1,733,000 to £15,894,000. According to people interested in them, the universities are Cinderella-like institutions that never receive enough money; but there is a limit to what a government can do. It would have been interesting if some one had sat down and added up the amounts for which the States and other bodies asked, by way of increased subsidies, increased taxation reimbursements and so on. Perhaps that has been done, but if it has I have not heard the result. I wonder what the total would be. Probably it would be nearly as much as the total Budget expenditure.

The provision for Capital Works and Services has been increased by £6,307,000. The proposed expenditure by the Snowy Mountains Hydro-electric Authority has been increased by £8,140,000. Those of us who have had the privilege of seeing the Snowy Mountains scheme will not begrudge any money that is being spent on that project. It is a magnificent one which not only does credit to Australia but also would do credit to any country. In my opinion it has been admirably conceived and the staff and workmen who have been and are responsible for carrying out the work, have done and are still doing a magnificent job.

The expansion of television and broadcasting services that the Government has planned will cost an extra £1,328,000 this year. Last year the expenditure was £2,847,000; this year it will be £4,175,000. Practically the whole increase is for the establishment of national television stations in provincial and country areas.

Capital expenditure by the National Capital Development Commission is estimated at £12,150,000 this year, an increase of £1,150,000 over expenditure last year. There is a good deal of criticism, particularly from people living in country areas, of the amount of money that is being spent on Canberra. I have said before that Canberra is Australia’s national capital and that we must have a capital that is worthy of Australia and of which all Australians will be proud when eventually it is finished. I am not saying that that has not been the object of the work that has been done; but the expenditure should be spread over the years as much as possible. I know that big problems have to be faced. There have been big increases in population here as a result of the transfer of Government departments from places such as Melbourne. These people have to be housed, administrative buildings have to be erected and so on. Although we may have to tighten our belts at the present time to find the money for this work, in the long run those who come after us will say that we did a good job in providing the money as we are doing at this stage.

Let us look at our development projects. I am pleased to see that an amount of £1,750,000 is being made available to assist in financing the first stages of a scheme to open up the rich brigalow lands in the Fitzroy Basin of central Queensland. This is a worth-while scheme. My only regret is that it has not been carried out earlier. I have been saying for quite some time that those people out there, miles from anywhere, should be helped. Quite apart from the financial assistance being granted to these people, the morale of the settlers there will receive a boost. This will be a good thing. The Kalgoorlie to Kwinana railway in Western Australia is starting to get under way and £4,300,000 has been put on the Estimates as a contribution towards it. Honorable senators will see that an amount of £500,000 was allocated last year to Western Australia for cattle roads. This grant is being increased to £700,000 this year. We are all pleased to see that. Taking into account the development activities in the Northern Territory, where £1,000,000 will be provided for cattle roads in 1962-63, these several projects are building up a substantial programme for northern Australia as a whole. It would come as a shock to many honorable senators if they would only take the trouble to read a paper published recently giving the amount of money spent in development of northern Queensland, the Northern Territory and northern South Australia.

Senator Drury:

– How much in South Australia?

Senator McKELLAR:

– Do not ask me that. I do not recall the figure, but I am sure that honorable senators would be pleased, and probably surprised, to learn the amount that has been spent there. For the improvement of coal-loading facilities in New South Wales the allocation this year is £685,000, compared with £284,000 last year. Senator Spooner dealt effectively with oil exploration to-night, and any one who is not satisfied with the assistance that this Government has given in financing the search for oil in Australia would be hard to please. There is no question about it; the Government has done a magnificent job in promoting exploration for oil. It is gratifying indeed to see the success that has attended this programme.

I have one complaint about the allocation for rural pursuits. Seeing the importance that the rural sector of our community plays in the economic life of Australia, I think it deserved a little more than the one paragraph devoted to it in the Budget speech. Help has been given to the rural industries in the manner that I have indicated. I realize, of course, that with the wheat stabilization scheme and the new legislation to be brought down, taking the cost of production into account, by and large, at this point of time, the wheat industry cannot be said to be in a very bad way. I think the wheat-grower is getting a fair deal. The sugar industry is being looked after; the dairyman is receiving a subsidy of £13,000,000. The wool-grower is getting what can be regarded as only very minor assistance from the Government itself, but it must be remembered that we are in the process of setting up a wool board - I think that will probably be the name of it. Until the personnel of that board have had a look at the problems confronting the industry and made their recommendations about marketing and other matters exercising the mind of the woolgrower the Government is wise in keeping out of the road and awaiting the recommendations that will no doubt come to it.

Again, I want to remind honorable senators who say that no help was given to the family man that we are still maintaining the reduction in sales tax on household items which was introduced months ago. The reduction in sales tax on motor cars still operates. Surely that is of some assistance. Any one who says that no assistance has been granted is not sticking to the truth.

I have one or two criticisms and I have left them until last. I would not be human if 1 were satisfied with the Budget; I do not suppose even the Treasurer is satisfied with it. I am disappointed to see that provision was not made for some concessions in probate duties, particularly for primary producers. The position is that when the owner of a rural property dies the family is probably faced with the problem thar during the seven years previously the value of the property increased considerably. The owner has received no benefit from this capital appreciation. He has still been living at the same rate as he was living before the value increased. When he dies, the estate is assessed for probate purposes and very often those who are left behind have to find a considerable amount of money in order to pay probate duties on an increased value from which they have received no benefit.

I know that submissions were made to the Government that the Commonwealth adopt the Victorian and South Australian ideas on probate duties for primary producers. I am still hoping that these ideas will be adopted. If this is done it will be an encouragement to the other States to adopt similar provisions which will tend to help primary producers. It must not be forgotten that unless you keep the primary producer on the land - irrespective of whether Britain enters the Common Market or what we do with our economy - Australia will not last very long.

Another class of people worthy of assistance - and who must be assisted - are the merino sheep breeders. Here we have an industry that has built up the whole of Australia’s economy. We are faced to-day with the situation that our big studs - there are not many of them representing great wealth although their owners have the name of being tall poppies - are going out of existence. Only a few stud masters - certainly not the majority - have great wealth. The Government should have a serious look at this problem. New studs are coming in, but they are very small, and because they are small they are not able to breed sufficient sheep to maintain our merino sheep industry at the high standard that it has enjoyed for the past 40, 50 or 100 years. It will be a sad day for us if these people are not encouraged to stay in the industry. In New South Wales the industry recently suffered from the death of one of our most prominent sheep breeders, Mr. George Falkiner. When the stud-master of one of these major studs dies it could well be that the family is not interested in the stud, and not merely the State but the whole of the Commonwealth suffers.

In asking for these concessions for the primary producer I urge that a lot of consideration be given to the matter. In the minute and a half that I have left I want to devote my remarks to something of very grave consequence to the Country Party particularly in New South Wales. I refer to electoral re-distribution. This is another blow at decentralization. We have suffered very much in New South Wales from centralization on a State basis, and now from this last recommendation it looks as if another country seat will be lost. Irrespective of whether the seat is held by an Australian Labour Party representative, a Liberal Party representative or a Country Party representative, the fact is that we are losing a country seat and I could not condemn this more strongly. It is something we cannot stand for. Mr. Acting President, I have very much pleasure in supporting the Budget.

Senator TANGNEY:
Western Australia

.- This is the twentieth budget that I have considered since I became a member of this chamber, and I think that no budget has given me less cause for satisfaction than that which is at present before me. Some Government supporters have damned it with faint praise, and Senator McKellar was at pains to read an extract from a newspaper which indicated that some section of the primary producers somewhere thought the Budget was not too bad. I think that the comment of the president of the Housewives Association is much more pertinent. She called it a wet fish and said that it was no wonder the Government kept the Budget provisions a closely-guarded secret because probably it was too ashamed to let them be known.

I speak to this Budget, not from the point of view of an economist or a theorist, but from the point of view of the ordinary man and woman in the street. To them this Budget gives very little. We are told that it is a pep budget which will pep up the economy in some way. Insofar as it does give some stimulus, however small, to the economy, we commend it, but we do say it gives too little and it is too late. It is significant that this time last year when the Labour Party suggested that the Government should introduce a deficit budget to relieve the financial distress of the times, it was told that that was absolutely impossible or that it would be wrong to do so. After the people had spoken in no uncertain way in December last, the Government, a few months later, brought down a small supplementary budget which embodied some of the ideas which the Labour Party had put before the people previously.

Due to that little budget there has been a slight improvement in the economy. I notice that some speakers have claimed a great improvement in the employment situation. That is not so in my own State, which, by the way, has received a better deal in this Budget than have some other States. I should like to refer to that matter in a moment.

Certain aspects of this Budget, taken by and large, fall regrettably short of what could be expected of a government which has been in office for thirteen years. For instance, the defence vote has been increased by a little less than £7,000,000 this year, bringing the total vote for defence to £210,000,000. This slight increase in the defence vote is made irrespective of changing conditions to the north of us and of our added responsibility in the SouthEast Asian area. But even with this expenditure of £210,000,000 the Treasurer (Mr. Harold Holt) is unable to find the money necessary for the establishment of a naval base on the west coast of Australia. If the Government is getting tired of hearing me mention this subject, I am getting tired of putting up this plea to the Government. I hope that eventually my persistence will have its way and we will get what is needed.

I do not claim to be an authority on defence or on figures. I do claim, however, that from a common sense point of view - not only from the point of view of defence - it is vital to this country to have a naval base on our west coast. Until the day comes when we find oil in this country in commercial quantities - a day which we hope is not far off - most of the oil used in Australia will have to be shipped across the Indian Ocean, and this commercial sea lane must have protection. There should be some place on the west coast of Australia where ship repairs can be carried out with the minimum loss of time and the minimum inconvenience to the shipping interests.

Senator McKellar made play of the fact that an increase in repatriation and social service benefits was envisaged in this Budget and said that this provision contradicted the statement of the Labour Party that no increase in payments had been made under these two heads. Surely Senator McKellar knows that no increase at all has been made in social service and repatriation benefits. The additional costs envisaged in the Budget are due to more people coming into the pensionable field. More people are receiving the age pension because of the effluxion of time, and more will be receiving repatriation benefits as time passes since the end of the war. A larger number will be receiving service pensions because as they grow older they will require hospitalization for war-caused injuries.

It is natural that there should be an increase in the expenditure on repatriation and social service benefits. In addition extra money is needed because of the measures introduced earlier this year. Nevertheless, this is one aspect of the Budget with which every right-thinking citizen of Australia disagrees most heartily - the fact that no provision is made for an increase in social service payments. The position is all right for us, with our good salaries, but let us think about those who have to manage on social service benefits payments. We know that in terms of pounds, shillings and pence the amount that is now received by a pensioner is much greater than the amount received when the Labour Government left office. I am getting in first with that statement so that an honorable senator opposite will not tell me. However, when purchasing power is considered no increase has been made in the pension at all.

Senator Henty:

– No increase since 1949!

Senator TANGNEY:

– No, not in the purchasing power of the pension. There has definitely been an increase in the amount of money that is being paid, but not in the purchasing power of the money received by the pensioner. You have only to consider how the cost of living has increased in the interim to know that what I say is true.

Again I am going to tread on ground I have trodden on before. Most people know what I am going to say before I say it, but I intend to keep on at this until something is done. One of the biggest injustices in our social service legislation is the plight of our civilian widows. Senator McKellar said to-night that it was ridiculous to suppose that children in Australia went hungry. But that is true in the case of civilian widows with children who have to exist on a civilian widow’s pension. We are told by a beneficent government that the widow can go to work and earn a certain amount, which is determined by the size of her family. No widow who has the care of young children can leave them to go to work. It is physically impossible for her to do so. The provision whereby she can earn extra money becomes absolutely meaningless in the case of the great majority of civilian widows with children.

I put in a special plea for something to be done to give the civilian widows an extra amount to enable them to bring up their children and maintain themselves at a standard of living to which they are entitled. It is the fashion these days to talk about juvenile delinquency. Quite recently a survey was made in which the blame, for juvenile delinquency was placed upon the parents. I know from my own experience of teaching delinquent children before I came here that many of these children came from divided homes, or homes where the mother was forced to go out to work because the husband was dead. I think that we owe a great deal to women who are able to keep their families together on the civilian widow’s pension, small as it is. We do not even extend to the civilian widow the additional payment of 10s. a week if she happens to be trying to pay off a home for herself and her family. Perhaps, when her husband died, he left her a small equity in a house; It is absolutely impossible these days to rent a house if you have children. The only way for such a woman to keep a roof over her head is to buy a home or to keep up the payments on the home she was occupying with her husband before his death. The woman who is attempting to do that is not even entitled to the 10s. a week supplementary rent allowance, despite the fact that she must meet rates and taxes. No allowance is made for the fact that she is a widow. I put it to you, Mr. Acting Deputy President, that the Government should see to it that the civilian widow receives a fair deal. She is not receiving it at present.

I also wish to speak for another class of women who are being very badly treated. I refer to the wives of age pensioners who have not reached pensionable age. I am not thinking of the young woman of 20, 30 or even 40 years of age who is married to an older man; I am referring to a woman in her fifties. If the husband of such a woman has a government job, he has to leave his job the day he reaches retiring age, but he becomes eligible for an age pension. Unless he has made some provision for his old age it is impossible to make ends meet. If the person concerned is a labourer in the Public Works Department, such as one person I have in mind, his employment ceases the day he reaches the age of 65 years.

Recently, I brought to the notice of the Department of Social Services the case of a woman of 58 years who is not in the best of health. She has reared a family which is now scattered and is unable to help. Her husband was working in a very humble capacity until he had to leave work. He had no alternative. At 65 it is hard for a man who is an unskilled labourer to obtain another job. When the man of whom I am speaking applied for social service benefits he was told that he could get an age pension, but that his wife was not entitled to a pension. When people are young and in love, it is said that two can live as cheaply as one. But when they are up in years, they find that that is not so. The only assistance that that woman could obtain from the Department of Social Services was the information that if she registered for employment and a job could not be found for her, a partial unemployment benefit payment might be made to her after consideration of all the circumstances.

I do not know what will happen if a job is actually found for her, because she is 58 and is not well. Even the more menial jobs which were available for a woman of that age, without previous experience, once upon a time are not now available in the commercial or industrial fields. The use of washing machines and electric gadgets in homes has done away with the laundry and cleaning work that used to be available. So, we have in the community a group of women for which no provision is made. There are no jobs that they can get. They are obliged to satisfy the officials at the local employment office that they have applied for and have been unable to obtain work. In one case with which 1 was dealing, each week the woman concerned had to supply the names of a certain number of employers who had been unable to give her employment. Imagine the short shrift she would get from some people if she went to them each week and asked them for a job. She had to take the refusals back to the Department of Labour and National Service each week. A woman would become a public nuisance in trying to obtain notes to say that she had applied for jobs and could not get them. This woman of 58, of whom I have spoken, is not in the best of health and had no opportunity to save for her advancing years. She and her husband now have to live on £2 1 2s. 6d. a week. Yet Senator McKellar says there is no such thing as hunger in this country.

We have been told that the target of 125,000 migrants is to be maintained this year. I hope that it is. We are very proud of the immigration programme which was initiated by the Labour Government in the immediate post-war years, but I should like to see more discrimination shown in the choice of migrants. I have had quite a lot to do with migrants. They come to my home at week-ends looking for work. There are migrants who are absolute nohopers. Some of those who cannot obtain jobs are definitely unemployable. They have never had a job since they have been in this country. The result is that they are dissatisfied. They want to get out and do not want to make homes here. I think there is something lacking somewhere. Perhaps it is overseas, in the migration teams who select the migrants. I am not speaking of the 90 per cent, or 95 per cent, of migrants who are assimilated into the community. However, when we find that there are men who simply cannot be employed and who become disgruntled, we must appreciate that they could jeopardize the whole of the immigration system, because their grumbles receive the greatest publicity. In addition, in many cases they could be a charge on the community as long as they lived.

In the same vein, 1 point out that one of the difficulties which quite a number of migrants are facing is that of finding a house if they are able to obtain a job. Once a migrant obtains a job and goes from the migrant camp he is on his own. He is nobody’s responsibility. Quite recently, I learnt of a man who had obtained a temporary job for a week. A house went with the job, but the job did not last for more than a week. That man, with a wife and five children, were thrown on their own resources. I went from agent to agent looking for a house for them. As a matter of fact, I was bitten by a dog at one place. The houses that were available for a family were of a type which would not in normal times be suitable for human beings to inhabit. Yet, rents of as much as £5 10s. a week were being charged for them.

I do not think it is fair to bring migrants to this country - family men with high hopes - and not have houses for them in which to bring up their children in conditions which are at least as good as those which they have left. Therefore, I say that if we are to maintain our migration programme we have to view it alongside the employment position and also the housing problem, because the three go hand in hand. I should not like to see a cut in the immigration programme because we need these people. Nevertheless, I think it is cruel to bring them here when there are no jobs and no houses for them. The point is sometimes made that the various States are sending missions overseas to encourage migrants to come to Australia. The result is that the claims of one State arc being counter-balanced by those of another, and in the pursuit of migrants rash promises are being made in order to attract them to a particular State. I think that is wrong. Migrants should be encouraged to come to Australia, and I am sure that that is the line that our Commonwealth migration authorities are taking.

Recently, a three-man mission flew by jet aircraft to London. It was given a great deal of publicity. Last week’s press headlined the fact that as a result of its efforts nine tradesmen were being flown out to Australia. Of course, more tradesmen may come later. The need for such tradesmen is said to be urgent. Yet, the number of unemployed skilled tradesmen in Western Australia is rising. In to-day’s issue of the “ West Australian “ newspaper, the Premier of Western Australia is reported to have stated that because of the rise in unemployment amongst skilled building tradesmen in the Albany district, which is in the electorate of Mr. Freeth, the Minister for the Interior, building tradesmen had to go to other places to obtain work. They had to be prepared to leave their homes and go elsewhere if they wanted jobs. They are prepared to do so as long as there are decent jobs available for them, but they cannot be expected to break up their homes.

There is no need for publicity to attract skilled migrants from overseas when we already have skilled migrants who cannot obtain jobs. It is only necessary to go to the offices of the Department of Labour and National Service on a Monday morning and to see the queues of people seeking jobs, extending right down the street and round the corner, to realize the truth of my remarks.

Debate interrupted.

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The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Question resolved in the affirmative.

Senate adjourned at 11 p.m.

Cite as: Australia, Senate, Debates, 15 August 1962, viewed 22 October 2017, <>.