24th Parliament · 1st Session
The Senate met at 3.30 p.m.
The Acting Clerk. - I have to announce that the President and the Chairman of Committees are unavoidably absent.
Motion (by Senator Spooner) agreed to -
That Senator Wood do take the Chair of the Senate to act as President for this day.
The ACTING PRESIDENT (Senator Wood) took the chair, and read prayers.
Motion (by Senator Spooner) proposed -
That so much of Standing Order No. 30 be suspended as would prevent Senator Wood from taking the Chair of the Senate to act as President for each day on which the President and the Chairman of Committees are absent.
The ACTING PRESIDENT. - There being present an absolute majority of the whole number of senators, and no dissentient voice,I declare the question resolved in the affirmative.
– I ask a question without notice of the Minister assisting the Minister for External Affairs. Will the Government instruct Australia’s representative at the United Nations to support fully the plea of the Israeli representative for an investigation into the re-emergence of Nazi-ism and anti-Semitism in West Germany?
– I think the attitude of the Australian Government was made perfectly clear in the United Nations Third Committee when last week it raised the matter of anti-Semitism in Germany. It urged that all such attacks on religious freedom should be stopped and that if any country felt that it could not stop those attacks it should allow the objects of such attacks to emigrate.
– In Russia, not Germany.
– Is the Minister for National Development aware that South Australian Liberal senators are . being blamed through a press attack for the fact that beef roads in the north of South Australia are inadequate for the motor transport of cattle to market? Will the Minister clarify the situation by stating whether roads are a Commonwealth or a State responsibility? Of the funds allocated under the agreement between the Commonwealth and the States is 40 per cent, earmarked for country roads and could some of that money be used for beef roads in South Australia? Since Mr. Ray McAuley, a member of the executive committee of the South Australian Woolgrowers and Graziers Council said on Saturday last that South Australian Liberal members appeared to be indifferent to the future of the South Australian beef industry, will the Minister confirm that steps have been repeatedly taken by South Australian Liberal senators, both in this chamber and in private negotiations, to press the Government to consider the South Australian case for special consideration for beef roads? Will the Minister say whether the Cabinet has, at our request, considered this matter and, if so, with what results? Did the Commonwealth Government instigate an investigation by the Division of Agricultural Economics for an appraisal of the beef industry in South Australia? Did the Division of Agricultural Economics produce in 1960 a report recommending that at least £440,000 be spent on four beef transport tracks in the north of South Australia to provide for reasonable motor transport of store cattle? Following that report did the Premier of South Australia request a sum of £2,000,000 for that project? If this request was not given favorable consideration by the Commonwealth Government, has Sir Thomas Playford made any more recent amended or reduced requests, and if so will the Government give them urgent attention?
- Senator Buttfield’s question is fairly comprehensive. I do not know whether I can cover all the ground that she has asked me to cover. I do not know the Mr. McAuley to whom Senator Buttfield refers, but it is obvious that he does not know the Government senators from South Australia. If he did, he would acknowledge that they have looked after the interests of South Australia in the Senate.
In relation to roads, there is a general overall principle. A few years ago the Commonwealth increased very substantially the appropriations of Commonwealth funds for road-building purposes. A programme was initiated which - I speak from memory - provides for £50,000,000 of Commonwealth funds to be allocated annually over a period of five years. This money is to be used for road construction, and there is a specific proviso that 40 per cent, shall be spent on country roads. This is the old story of the Commonwealth giving until it hurts and of critics then complaining because additional money has not been provided for pet proposals of their own.
We start upon the basis that £50,000,000 is provided annually by the Commonwealth for roads. If additional money is requested, the criterion used in making a decision is whether the expenditure of the additional money would yield enough extra export income to justify the expenditure. The Commonwealth received a request of this kind from South Australia twelve or eighteen months ago, I think. The request was very carefully examined, but it was decided that the export benefits would not justify the spending of the extra amount requested. The South Australian Premier was told that he had not made out a case for a grant greater that his share of the £50,000,000 per annum. That is all I can say about that. The Commonwealth continually receives applications from various States for money for various purposes. In each case it asks the question, “ Would the expenditure bring more export income? “ That question was asked in this case, and South Australia was advised of the decision. I have a recollection that another application from South Australia was received within the last week or so. If that is so, I can say only that it has not yet been examined by the Commonwealth.
– My question is directed to the Minister for Civil Aviation. Has his attention been directed to ah article that appeared in the Melbourne “ Herald “ of 29th October last, in which it was stated that the Victorian Premier, Mr. Bolte, had protested strongly to the Prime Minister over the Commonwealth’s issue of a liquor licence to the Royal Victorian Aero Club at Moorabbin airport? Is the Minister aware that Mr. Bolte stated in his letter to the Prime Minister that the Victorian Chief Secretary, Mr. Rylah, had made the most vigorous and emphatic objection that one Minister could make to another when told by Senator Paltridge on 28th December of last year that he proposed to authorize the issue of a liquor licence? Is the Minister aware that Mr. Bolte stated further that the strength and vigour of this protest seemed to have entirely escaped the unreceptive Minister for Civil Aviation? Is the Minister aware also that Mr. Bolte complained that he did not receive a reply to his letter of 28th February until 22nd September? In view of this adverse criticism, will the Minister give the Senate -some information about this matter?
– Yes, I am aware that Mr. Bolte made the press statement to. which the honorable senator has referred. I have had occasion to read it. As the honorable senator no doubt recalls, this matter goes back some months, indeed to December last year, when I wrote to the Victorian Chief Secretary, Mr. Rylah, advising him that an application had been received from the Royal Victorian Aero Club for a licence at Moorabbin airport and telling him that I proposed to issue to this club an authority to sell liquor. With my letter to the Victorian Chief Secretary, I enclosed a copy of the authority that I proposed to issue to the club. Incidentally, as is the practice in these matters, the authority conformed as closely as possible to a club licence issued under the Victorian licensing legislation.
Mr. Rylah replied to me by letter, putting certain things to me. I replied to that letter late in January this year, as I recall it. I pointed out that the proposal that he had made could not be implemented because of the nature of the Commonwealth legislation which throws an obligation upon the Minister for Civil Aviation in regard to the issuing of authorities of this kind. The Premier of Victoria subsequently wrote to the Prime Minister. As a result of that letter, I personally saw Mr. Rylah in June this year and discussed the matter with him. At that interview he put a certain further proposal to me in respect of how this licence might be issued by the State Licensing Authority. I told him then that I did not think that his latest suggestion was practicable, but that I would take it away, examine it more closely and discuss it with the Attorney-General. I subsequently conferred with the AttorneyGeneral on the legal aspects of the proposal put to me by the Victorian Chief Secretary.
The Acting Prime Minister wrote to the Premier of Victoria on 20th September this year, informing him, among other things, that his letter had been considered; that close consideration had been given to the proposal made to me by Mr. Rylah; that all the matters had been considered very closely by the Commonwealth Government, as would be obvious from the fact that a period of nine months had then elapsed, during which the matter had been under review; and that we proposed to proceed with the issue of the authority. The authority was issued about fifteen days after the Acting Prime Minister’s letter to the Premier. The Premier has more recently written to the Prime Minister in connexion with this matter. As I understand the position, the Prime Minister has not yet replied. He still has the Premier’s letter under consideration. I have no doubt that in due time a reply will be forwarded to the Premier.
– It is a fact that fast air travel is increasing the risk of the entry into this country of yellow fever, cholera and smallpox. For some years now the Australian Government has declared India and Pakistan to be countries from which cholera could be brought into this country.
Within the last month, it has added Hong Kong, the Philippines, Indonesia and West New Guinea to the list. All persons entering Australia from those places should bring with them current vaccination certificates. Those who fail to present such certificates are transferred immediately to quarantine stations.
Smallpox also presents an everincreasing threat to our health security, as a result of modern fast air travel, and the requirement to have a current vaccination certificate applies to all entrants to this country with the exception of those coming from New Zealand and, I think, East New Guinea. Earlier this year, the Government sent six medical officers to India to study the diagnosis and treatment of smallpox. I emphasize the word “ diagnosis “, because it explains our attitude towards this threat.
As honorable senators know, yellow fever is a mosquito-borne disease. AH entrants to Australia from certain equatorial regions must have current vaccination certificates in relation to this disease. In addition, great care is taken to spray aircraft when they arrive here from those areas. Often we receive bitter criticism from overseas travellers for taking these precautions, but, with great respect to those persons, I assure the Senate that, rather than relax the precautions, we will enforce them more strongly. I assure honorable senators that the Government is very much alive to the threat that exists and that it will take every precaution to keep this country clean.
– I ask the Leader of the Government in the Senate whether he has seen a press report in which it is stated that Albany, in Western Australia, is tipped as a base for a United States Navy ship carrying thermo-nuclear missiles for the purpose of arming nuclear-powered and nuclear-armed submarines. Is this report founded on fact? Has the Australian Government entered into any arrangement or negotiations with the United States of America in connexion with Australian bases for nuclear arms? W:.1I the Minister make a statement in the Senate explaining fully American activities in Western Australia in connexion with nuclear arms and communications?
– Perhaps the Minister for the Navy will answer the question.
– I think that the report referred to was picked up from a monthly magazine called “ Aeronautics “ or something of the kind. It was lifted from an article by an anonymous writer and was spread around the newspapers of Australia. I was rung up by various press representatives, who asked me about this article, and all I could tell them was what I now tell the Senate. I know nothing about the matter. I am quite sure that, as Minister for the Navy, I would know something about it if there was anything in the suggestion at all.
– I have seen the report to which the honorable senator has referred. I emphasize that it refers to developments in the fruit industry which may have a very important bearing on the industry in Australia. My understanding of the position is that the Department of Primary Industry has asked the State departments of agriculture to investigate the matter, further and that, as yet, no information has come to hand from those departments. When such information is available, I undertake to forward it to the honorable senator.
– Can the
Minister for Health inform the Senate of the real reasons behind the expressed intention of the Hospitals Contribution Fund of New South Wales to withdraw from its amalgamation with the Medical Benefits Fund of Australia Limited? Will the Minister intervene in this matter in the public interest, with a view to preventing excessive and unnecessary duplication of overhead costs in the administration of both funds, which appears to be the likely result?
– I understand that the Hospitals Contribution Fund of New South Wales has indicated that it wishes to terminate the agreement it had previously made for joint management with the Medical Benefits Fund of Australia Limited. I emphasize that that agreement still has twelve months to run. It does not expire until December, 1963. I should like the honorable senator to know that, so far as the Government is concerned, both organizations have always been, and still are, separately registered. The agreement into which they entered provided for joint management. The present problem is an administrative one. Knowing the management personnel of both organizations, I believe they will reach a solution that will not be to the detriment of contributors to the funds. I give an assurance that the developments will be closely watched and that the Government will not hesitate to take action if and when it is thought desirable to do so.
– I wish to ask the Minister for National Development a few questions. Did he notice in the press of 3rd November a statement by the scientist, Sir Mark Oliphant, regarding Australia’s most pressing problem, lack of fresh water, under the heading, “ Nuclear process answer to Aust, water . worry “? Six
Mark Oliphant said that he had seen in the United States of America, only a few weeks ago, proof that the process would work. Sir Mark also said that the transformation of sea water into fresh water involved the use of a newly perfected method of treating the sea water with a nuclear reaction, and that it would be possible to introduce the system into Australia in the fairly near future. I ask the Minister: Because of its great and vital importance to Australia, will the Minister have the system thoroughly investigated, and the resultant information given to the Senate and the Australian people?
– I know something of the matter to which Senator Brown has referred. I doubt very much that I could answer the question in adequate terms because this is a highly technical scientific matter. As I understand it, the experiments have proceeded to a stage which gives hopes for satisfactory conclusions, not in the immediate future but after further experiments have been made. However, tremendous capital expenditure would be needed to produce in sufficient volume power of the particular type required. One comparison in respect of cost that was mentioned to me was that the work might need a capital investment as great as that contemplated, by the Commonwealth Government in the Snowy Mountains scheme. So this is not a project on which one could express opinions offhand. Sir Mark Oliphant’s statements have been placed before the Government and we will be making inquiries into them. I doubt very much that we could contemplate making any statement to the Senate or reaching any firm conclusions on the matter in a short period of time. Rather, I have the feeling that it is a development which we would need to watch closely for perhaps a couple of years to see how it panned out as experiments proceeded.
– My question is directed to the Minister for the Navy. In the Government’s latest statement on defence policy, the Minister for Defence said that the stationing of Royal Navy submarines in Australia provided the oppor tunity for Royal Australian Navy personnel to gain experience in submarines. However, the Minister did not say anything about acquiring submarines for the Royal Australian Navy. I ask the Minister for the Navy, therefore, whether the Royal Australian Navy will be making any preparations within the new three-year programme to acquire submarines. If submarines are to be acquired, what types are under consideration? Are the Navy’s fixedwing aircraft to be withdrawn from service next year as proposed? If so, would this not deprive the Royal Australian Navy of an important element in its air cover and also of a significant extension of its striking power? Are the fixed-wing aircraft now aboard H.M.A.S. “Melbourne” still serviceable? If so, would it not be in the best interests of both the Navy and the Army - which .needs close air support for amphibious operation - to keep these aircraft in service?
– The funds available to the Royal Australian Navy in the first year of the three-year programme announced by the Minister for Defence - that is, in this financial year - are fully committed on things which have already been ordered or are in the course of delivery. The Minister for Defence announced that some submarine training would be undergone by Royal Australian Navy ratings. It is probable that in the second two years of the three-year programme some funds will be available to the Navy for things other than those on order. The provision of submarines would be one matter that would be investigated, and it is being investigated by the Navy now. Numbers of items of new equipment might be bought and a choice would have to be made between them. The provision of submarines to take the place of the Royal Navy submarines would come within this category.
The fixed-wing aircraft in “ Melbourne “ are serviceable. The Minister for Defence, in his statement, indicated that the flying of fixed-wing aircraft would continue after 1963 at Nowra, in the form of a fleet reconnaissance unit. Whether or not it will continue after 1963 from aircraft carriers as well is another matter that will have to be taken into consideration.
– Has the Minister representing the Minister for the Army noted the criticism by the Australian Medical Association, which was published in the association’s official journal, of the antiquated services available to the defence forces of Australia, with particular reference to the Army? Has he any comment to make on the statement that the medical services and equipment of the forces are not in any way adequate for modern warfare? Can he advise the Senate whether the Government is taking action in respect of the matter, and if the opinions of the Australian Medical Association’ are found to be right, will the Minister give an assurance that early corrective action will be taken to ensure that the medical services of the defence forces are made adequate and up to date, in keeping with the requirements of modern warfare?
– Yes, I did read the article with some interest. I understand from discussions with the Minister for the Army that this matter is being considered by the Army. If the honorable senator will put the question on the notice-paper, the Minister for the Army will be able to supply him with further details.
– I direct to either the Minister representing the Minister for Labour and National Service or the Minis- ter representing the Minister for Shipping and Transport, whichever be the appropriate Minister, a question with reference to the ship “P. J. Adams”. The last news that I heard with regard to this vessel was that a Chinese crew had arrived in Australia to take her from this country, and that some preposterous proposal had been put to the Government for the payment of a subsidy of something like £35,000 a year towards her operating costs, in order to dispense with the Chinese crew and take on an Australian crew under Australian conditions. Can the Minister inform me whether this Chinese crew is in Australia or whether the ship has left Australia?
– A suggestion was made by the Seamen’s Union of Australia, I think, to the Government, that a subsidy pf the order mentioned by the honorable senator should be paid.
– And by the Australian Council of Trade Unions.
– The Australian Council of Trade Unions subsequently took the matter by deputation to the Prime Minister, who declined to meet the request of that body, a request which was, 1 repeat, initiated by the Seamen’s Union. I am not quite sure whether or not the ship has sailed with the Chinese crew, but I understand that it has.
– Has the Minister for Civil Aviation seen in a section of the Tasmanian press of 2nd October the report of a statement allegedly made to the State Parliament by the Tasmanian Premier, Mr. Reece, in which it is implied that, owing to the reconstruction of Launceston airport, that airport will be closed to Viscount and larger aircraft for three years? Will the Minister say for how long the Launceston airport will be open only to .DC3 and Fokker aircraft? When will restrictions on the use of the airport commence?
– The press report of the proceedings in the Tasmanian Parliament was brought to my attention. It is not true that the Launceston airport will be closed to Viscount aircraft for three years. In my statement some weeks ago, in which I announced the Government’s intention to up-grade the Launceston airport, I said that a major undertaking would be the reconstruction of the main runway. I indicated that while that work was being undertaken it would be necessary for aircraft to land on a strip parallel to the runway. However, I pointed out that this situation would apply for some nine months and that it was hoped that the period would be even less than that. I am not able to say at the moment when this work will be undertaken. As’ I stated some weeks ago, it is expected that the work will be submitted to the Public Works Committee for consideration before the end of this year.
Senator- BISHOP. - I ask the Minister assisting the Minister for External Affairs whether the Government’s attention has been directed to a statement by Mr. C. C.
Verco, president of the Australian Associated Chambers of Commerce, which appeared in the Adelaide “ Advertiser “ on 30th October last, in which he criticized the amenities provided for Australian ambassadorial staffs and the conditions under which they work. Mr. Verco claimed that in one country where the climate was hot officers had only one small air-conditioning unit in their homes, and that the unit had to be moved from room to room. Mr. Verco has suggested that £250,000 should be spent to raise the conditions under which ambassadorial staffs live and work to a standard more comparable with that enjoyed by British and American staffs. Will the Minister say whether the Government has considered this matter?
– I have not seen the statement attributed to Mr. Verco, but it is always open to a private person, after having made a visit abroad, to criticize the conditions under which Australia’s diplomatic staffs abroad live. The conditions of service are constantly reviewed by the Public Service Board, which has officers travelling throughout the various areas concerned, making on-the-spot investigations and suggestions as to how bad conditions in posts abroad may be ameliorated. Those officers, of course, have regard to the fact that Australia’s diplomatic officers are not the only officers stationed abroad. There must be a general level of amenities for all Commonwealth officers stationed in overseas countries. The matter is constantly under review by the Government.
– Will the Minister representing the Prime Minister say whether the Western Australian Government has made a further application for financial assistance to carry out extensions to the comprehensive water scheme which serves the country areas of Western Australia? If so will the Minister state the terms of the application? In view of the vital importance to primary industries in Western Australia of extending the water scheme, will the Minister say whether the Government has yet considered Western Australia’s application, and what decision has been reached?
– All I can say is that I have no recollection of any recent application or representations in relation to this matter by the Western Australian Government.
– I ask the Leader of the Government: Has the Government already determined that all Commonwealth departments in Melbourne are to be transferred to Canberra? What steps have been taken to prepare for the transfer to Canberra of the Department of Labour and National Service? Will the Government consider giving some indication of the date upon which that department is likely to be transferred so that trade union and other organizations may make plans for acquiring premises and otherwise in order to avoid unnecessary dislocation of their affairs?
– I am afraid that I cannot give Senator Murphy all the information that he seeks. All I can do is to give a general outline of the position. There is an order of precedence governing which departments and which parts of departments are to be transferred to Canberra. I am quite certain that senior officers in the Department of Labour and National Service will know where their department stands in that order of precedence. They will have a fairly good idea of the sections of their department that are to be transferred to Canberra and the approximate year in which the move is to take place.
– Has the
Minister representing the Minister for Trade read the stirring defence offered by the United States Ambassador in Australia when he attempted to allay the fears expressed by certain well-informed critics that the recent United States trade expansion legislation would result in dumping of American goods on world markets? Does the Minister agree that the legislation would have the effect envisaged by those critics? Does the Minister agree with the comments in the Melbourne “ Age “ that from Australia’s point of view the legislation cannot be regarded as a gilt-edged investment? As this United States legislation has been under public review for the past year, will the Minister present to the Senate a considered statement, based on reports sent to the Government by its trade representatives stationed in the United States, covering the advantages and disadvantages of the legislation as far as Australia is concerned?
– The United States Ambassador has replied to certain criticism of American trade policy. I am sorry, but I have not seen his statement.
Dealing with the other aspects of the question, I do not think it would be practical to ask our overseas representatives to discuss the possibilities of the United States trade expansion legislation. I think the Government has a pretty solid grip of the meaning of the legislation and its potentialities. As I understand the position, as time goes by there will be room for discussion, argument and negotiation, commodity by commodity. When the United States wants to negotiate an arrangement in respect of a particular commodity, whether it be lead, zinc, copper or a primary product, it will take up negotiations with the Common Market mainly, we hope, through the organization of the General Agreement on Tariffs and Trade, in whose discussions we will have an opportunity to participate. That is the general picture. This is the old story in trade matters. Each matter affecting each bargain needs to be negotiated separately.
– I direct a question to the Minister representing the Minister for Immigration. Could a special investigation be made of the possibility of obtaining additional migrants from Austria? I am prompted to ask this question because I have been informed that, owing to its geographical position, Austria is receiving at present large numbers of refugees from behind the iron curtain. They are coming from Yugoslavia, Hungary, Czechoslovakia and Bulgaria. I have been informed also that the refugees who enter Austria cannot remain there permanently, and that, in the main, they are young people who would be suitable migrants for Australia. I ask the Minister whether he will seek a report from the immigration officers in Austria about this matter.
– I have just received the latest quarterly statistical bulletin issued by the Department of Immigration, but at the moment I cannot put my finger on anything in it about Austria. I think it would be better if the honorable senator were to put his question on the notice-paper. If he does so, I will get the Minister for Immigration to give him information about_ this area.
– My question is directed to the Minister representing the Minister for External Affairs. Is it a fact that the Australian representative at the United Nations recently bitterly attacked alleged anti-Semitism in the Union of Soviet Socialist Republics? Is racial discrimination being practised by the South African Government? Did the Australian representative at the United Nations refuse to support the use of economic sanctions against South Africa, pending that country abandoning its policy of racial discrimination? Was the Australian representative representing the policy of the Australian Government in both these instances?
– In a recent meeting of the third committee of the United Nations, which deals with questions of racial and religious discrimination, the Australian representative, on the instructions of the Australian Government, and clearly representing the policy of the Australian Government, raised the question of such discrimination inside the Union of Soviet Socialist Republics, but his argument applied to discrimination in any country. He urged that religious discrimination should cease, but that if Soviet Russia or any other country felt that it could not allow religious freedom to such minorities as the Jews, the people who were being persecuted should be allowed to emigrate.
In relation to racial discrimination in South Africa, on previous occasions the Australian representative, on the instructions of the Australian Government, and clearly representing Australian policy, expressed his abhorrence of that discrimination. He did not express the hope that people of coloured races inside South Africa should be allowed to emigrate, because, in fact, they are allowed to emigrate, but he did express Australia’s abhorrence of racial discrimination in South Africa. He did not go further and support a proposal for the imposition of sanctions on South Africa because, as was brought out in debate in the Senate previously, the Australian Government believes that an attempt to impose sanctions would be likely to do more harm than good - I speak of economic harm particularly - to the people living in South Africa.
– My question is directed to the Minister for National Development. Is it a fact that many applications have been, and are being, made to the War Service Homes Division for loans for the addition to war service homes of motor car garages and car ports, and that these applications are being refused? Are the refusals brought about because insufficient funds are allocated for war service homes? If sufficient funds are allocated to the War Service Homes Division, will the Minister consider granting these requests for loans for additions to homes? If sufficient funds are not available to meet these requests for additions, will the Minister consider increasing the amount allocated to the War Service Homes Division so that the requests can be granted?
– The allocation for war service homes this year is £35,000,000. That is a very generous allocation, considering that the war has been over for so long. The governments in Australia, between them, are spending £100,000,000 a year on housing. Ex-servicemen, in receiving £35,000,000 out of that total of £100,000,000, get real preferential treatment. Since the maximum loan was increased from £2,750 to £3,500, a large number of applications has been received for loans for additions to homes. It is not possible, within the £35,000,000 allocation, to meet all those requests if the division is to implement a policy, as I believe it should, of granting loans for new buildings without any waiting time. I understand that 69 per cent, or 70 per cent, of all applications for war service homes loans are granted without any waiting time. I have no reservations when I say that I was not willing to make funds available to build garages if that would have meant deferring the granting of applications by people who did not have homes.
– I direct a question to the Minister representing the Minister for Shipping and Transport. Are ex-soldiers in receipt of total and permanent incapacity pensions granted concessions when travelling on the Commonwealth Railways? If so, what are those concessions, and where do the pensioners apply for them in each State?
– Concessions of this kind are made available to members of totally and permanently incapacitated pensioners’ association. I do not recall the circumstances in which the concessions are granted, but I think the association makes the application for the member concerned.
– Cannot the exsoldier apply direct to the Commonwealth Railways?
– He may be able to do so, but I am not sure. My recollection is that the application is always made by the association on behalf of the member. I think the best thing I can do is to ask the honorable senator to allow me to obtain the information for him.
asked the Minister representing the Minister for Shipping and Transport, upon notice -
– The Minister for Shipping and Transport has supplied the following answers: -
asked the Minister representing the Minister for Labour and National Service, upon notice -
With reference to the statement made by the Minister on 28th September, commenting upon an outburst by Mr. Kenny, M.L.C., at a meeting of union shop stewards in Sydney on 27th September relative to proposals on the subject of long service leave, will the Minister inform the Senate of the substance of the proposals that are being put before the New South Wales Parliament and will he comment upon the possibility of maintaining any degree of stability in the economy while political forces, Sta.te and Commonwealth, are in competition to create imbalance in the underlying costs of the economy?
– The Minister for Labour and National Service has supplied the following information: -
I have no reliable information concerning amendments of the New South Wales long service leave legislation. So far as I am aware no bill on the subject has yet been introduced.
asked the Minister for Health, upon notice -
– The answers to the honorable senator’s questions are as follows: -
asked the Minister representing the Attorney-General, upon notice -
– The AttorneyGeneral has supplied me with the following answers: -
asked the Minister for Civil Aviation, upon notice -
Is it a fact that the Department of Civil Aviation proposes to build new terminal buildings at the Devonport aerodrome?
– The answer to the honorable senator’s question is as follows: -
No, the existing terminal built at Devonport is handling the traffic at that aerodrome satisfactorily and the funds available to my department for aerodrome development are being used on works more urgently required throughout the Commonwealth.
asked the Minister representing the Minister for Immigration, upon notice -
– The Minister for Immigration has supplied the following answer: - 1 and 2. The matter is one to which serious consideration is being given, with a view to seeing whether there is any way to help which would be in the best interests of all concerned.
asked the Minister for Health, upon notice -
– The answers to the honorable senator’s questions are as follows: -
– Pursuant to statutory requirements, I lay on the table the following paper: -
Petroleum Search Subsidy Acts - Third Annual Statement by the Minister concerning the operation of the Petroleum Search Subsidy Act 1959-1961 and payment of subsidy, for year 1961-62.
Fifth Annual Statement by the Minister concerning the operation of the Petroleum Search Subsidy Act 1957-1958 and payment of subsidy, for year 1961-62.
– I move -
That the paper be printed.
I ask for leave to make my remarks at a later stage.
Leave granted; debate adjourned.
– For the information of honorable senators, I lay on the table the following paper: -
The Commonwealth and Education - Statement by the Prime Minister, dated 6th November 1962.
With the concurrence of honorable senators, I incorporate the paper in “ Hansard “ -
Australia, in common with most other countries of the world, has seen, since the Second World War, an increased interest in and demand for formal education. Technical and economic progress depends upon highly trained personnel. The values in which democracy places its faith require opportunities for the balanced personal and social development of each citizen. The character and quality of our educational institutions are of concern to us ali.
The most obvious aspect of the educational expansion in Australia has been the unprecedented increase since the war in educational enrolments. In the decade from 1951 to 1960 enrolments in all schools at primary and secondary level increased by 65 per cent. During the same period, university enrolments increased by 76 per cent. Technical colleges and teachers’ colleges have shown similar expansion.
Along with this phenomenal increase in numbers has been a general diversification of educational provision. Changes are occurring in the structure of secondary education. Technical colleges and universities are introducing new courses. The ground to be covered in scientific studies is continually expanding. Awareness of Australia’s place in the world at large and in relation to South-East Asia is leading to new emphases in studies in the humanities. Provision has now to be made to educate in our schools, technical colleges and universities large numbers of students from overseas. Higher standards are being attained, more children are going further in secondary education, higher proportions are being educated at university level, more post-graduate studies are being undertaken. All of these trends are exerting considerable pressures on our education system.
Not surprisingly, these important developments are associated with greater and greater demands on the resources of governments, although private organizations, the churches, industry and the individual citizen are all making valuable contributions. It is on the State governments that the main burden falls since, under the Australian Constitution, the prime responsibility for education rests with the States.
In 1960, 1,600,000 of the 2,100,000 children attending primary and secondary schools in the six States of Australia were attending government schools. This was 65 per cent, more children than were in these government schools ten years earlier. Part of this increase has been due to the fact that a greater percentage of children now stay at school longer, but, in the main, the increase has been due to population growth, chiefly by natural increase, although the arrival of immigrants has contributed a significant share.
Clearly, to provide for these extra numbers, more classrooms have been needed and more teachers have had to be engaged and trained. The States have responded to this challenge. Their schoolbuilding programmes have been greatly accelerated, new teachers’ colleges have been established and the teaching force greatly augmented. The costs of this expansion have been considerable and some figures comparing expenditure on various aspects of education in 1950-51 and in 1960-61 illustrate the rate of increase. In total, the States between them found it necessary to spend about £184,000,000 on education in 1960-61 compared with about £46,000,000 in 1950-51, a fourfold increase.
It is not the purpose of this document to detail the work done in education by the States or by other bodies. The States themselves are better able to do this. Its purpose is rather to draw attention to the fact that the Commonwealth Government, too, is deeply interested in education and contributes a great deal in one way or another towards its financial support.
It is recognized that education is a matter of great social importance and that there can be no richer investment than the intellectual and social development of our future citizens. It is also recognized that our educational costs must continue to grow with the healthy growth in our population and with the increasing demands for more highly trained personnel. But the fact that a matter is important to the nation does not mean that it should become primarily the responsibility of the Federal Government. Under the Australian Constitution, some matters are the responsibility of the Federal Government and some are the responsibility of the State Governments. Education is a matter that falls in the States’ sphere of responsibility not because of any lack of importance but because it is believed that State Governments are in a better position to assess local needs and provide for them. The proper role of the Commonwealth in this matter is to co-operate with the States, but not to take over their functions. Where the Commonwealth’s responsibilities in other directions have involved it in some educational or training programme, it has tended wherever possible to make use of existing State facilities rather than establish institutions of its own. This is as it should be.
So far as’ financial support is concerned, the Commonwealth’s approach has been to build up the States’ general financial resources. In this way, funds that are provided federally are spent on education, no less so than they would if they were given as direct grants for this purpose. The difference is that, as things are, the States decide the purposes.
The year 1960-61 may be taken as an example. In that year expenditure from the Consolidated Revenue Funds of the States (excluding expenditure on business undertakings) totalled almost £537,000,000. Of this amount approximately £279,000,000 (or 52 per cent.) came from Commonwealth general revenue grants - previously known as tax reimbursement grants - and special grants made by the Commonwealth on the recommendation of the Commonwealth Grants Commission. This means that for every £1 spent by the States about 10s. 5d. came from general revenue grants. In 1960-61 the combined State expenditure on education (excluding expenditure on research, art and cultural activities) was about £.142,000,000. Thus, on the basis of 10s. 5d. in the £, a total of about £74,000,000 was money provided through Commonwealth channels.
The other main component of the States’ expenditure on education is in respect of buildings. This expenditure is derived from the Loan Funds available to the States for works and other purposes. In 1960-61 the States’ gross expenditure from Loan Funds was about £215,000,000 and of this about £42,000,000 (or 20 per cent.) was spent on buildings for education. Again it needs to be remembered that the Commonwealth has directly assisted the loan market to assure the States of a total works programme which might be regarded as reasonable. The Commonwealth assistance to this programme in 1960-61 (excluding amounts provided for expenditure under the Commonwealth State Housing Agreement) amounted to about £57,000,000 (or 26 per cent, of the total). On this basis it might be said that the States’ Loan Fund expenditure, including that on education, was assisted by the Commonwealth to the extent of 5s. 2d. in the £. This meant that the Commonwealth supported the States’ Loan Fund expenditure on education to the extent of some £11,000,000.
What has been said above applies to State expenditure on universities, just as to any other educational expenditure. But in the case of universities it does not end there. The Commonwealth, in addition, makes grants to the States specifically for university purposes. In 1950-51 the Commonwealth began its present scheme of grants to the States for their universities. In that year the total of these grants was £500,000; in 1960-61 the total was over £11,000,000. Over the same ten-year period State expenditure on universities has also greatly increased: from £2,500,000 in 1950-51 to £17,000,000 in 1960-61. If the Commonwealth had not given special support, the maintenance of the present scale of operation of universities would have involved the States in much greater expenditure on universities, possibly at the expense of other fields of education.
Apart from assistance provided for State universities, the Commonwealth maintains the Australian
National University in Canberra.’ Expenditure for running costs and for capital works for this institution amounted in 1960-61 to over . £3,500,000. There are other ways in which the Commonwealth assists universities. For example, the Commonwealth maintains the School of Public Health and Tropical Medicine at the University of Sydney and, in a number of other ways, supports university research and teaching in particular fields.
Commonwealth commitments in the university field seem likely to increase. The extent of Commonwealth assistance was greatly increased in 1958, arising out of the financial recommendations of the Committee on Australian Universities (the Murray Committee). For the years 1961 to 1963 the grants are in accordance with the financial recommendations of the Australian Universities Commission, the body set up by the Commonwealth as a result of the recommendations of the Murray Committee. A special committee was established, in connexion with the Australian Universities Commission, to look into the needs of teaching hospitals, which are a fundamental part of the training programme of medical students. As a result of the recommendations of this committee, the Commonwealth has agreed to support, on a £l-for-£l basis, certain capital expenditure at teaching hospitals incurred because of their responsibility for training medical students. The question of support for recurrent expenditure is still under consideration. The Commonwealth has also set up a committee, again in association with the Universities Commission, to inquire into the needs of tertiary education in Australia. Its report is expected during 1963.
Support for universities is only part of the assistance given by the Commonwealth to the training in Australia of able students at the tertiary level. The other main segment of this assistance is the provision of scholarships to enable these students to undertake their courses. In 1961 nearly 13,000 such students were receiving benefits as Commonwealth Scholarship holders.
Under the Commonwealth Scholarship Scheme, which is controlled by the Commonwealth Scholarships Board, 4,000 new awards are given each year entitling the holder to the payment of compulsory fees and, subject to a means test, to a living allowance. That upwards of 17,000 young people have completed higher training with the help of this scheme is of great importance for a community which has so many calls for highly trained men and women. The need does not stop at first degree level and this fact is recognized by giving strong encouragement to outstanding students to prepare themselves for more specialized work. This is done by means of a scheme of post-graduate awards which now enables more than 250 distinguished graduates to undertake higher studies in our universities. The Commonwealth Scholarship Scheme began in 1950-51 at a cost to the Budget of £400,000, whereas expenditure in 1960-61 on Commonwealth scholarships, including post-graduate awards, exceeded £2,600,000. Other schemes are provided by the Commonwealth to assist former members of the defence services, and the children of deceased and permanently and totally incapacitated ex-members of the defence services.
There are Commonwealth grants to various professional organizations which carry out training programmes in their own fields, such as the
Colleges of Nursing and Associations of Occupational Therapy. Some of these grants are on a matching basis with those of the States.
All this, of course, is apart from the many institutions and training programmes at the tertiary level which the Commonwealth maintains for its own employees, such as the defence services educational establishments and those of the Public Service.
The Commonwealth has a direct responsibility in the fields of primary and secondary education insofar as its own territories are concerned. In some of these the service is provided by State Departments of Education on the basis of the Commonwealth paying the costs. There are school services, parallel to those in Australian States, in operation in the Australian Capital Territory and the Northern Territory; in the latter case there are, in addition, Commonwealth schools for aboriginal children who have not yet reached the standard for admission to the normal schools. In the Territory of Papua and New Guinea, and in the Northern Territory too, where education has the fundamental task of bridging the gap between a primitive and a modern culture, the education programme depends partly on the help of the Christian missions, who are given financial assistance towards the work they undertake. In some of the external territories, especially Papua and New Guinea, part of the educational cost is borne by the local revenues. In all, however, primary, secondary and technical education in the various Commonwealth territories, internal and external, is costing the Commonwealth almost £5,000,000 a year.
An important contribution to primary and secondary education is made by the Australian Broadcasting Commission which provides radio and television programmes for schools. This is an example of the way in which a Commonwealth authority is working in close relationship with State Education Departments, and with advice of their officers, to supplement in an important way what is being done in schools. These programmes, together with University of the Air, are handled by a special department within the Commission. Expenditure on these activities amounted to over £280,000 in 1960-61. Not only the University of the Air but the general broadcasting activities of the Commission undoubtedly contribute a great deal to the education of adults in the community. Another way in which the Commonwealth has helped adult education is by its continued financial support of “ Current Affairs Bulletin “ by way of an annual grant for this purpose made to the University of Sydney.
Children who come to this country as migrants receive, as they are entitled to do, appropriate education in the schools of the State in which they live. However, an important aspect of the assimilation of adult migrants in Australia - an adequate grasp of the English language and introduction to Australian ways of life - is provided with the co-operation of the States on the basis of the Commonwealth bearing the costs. These migrants are encouraged to study on the voyage to Australia, and, after arrival, in evening classes which are set up wherever there is a need for them. Correspondence lessons and radio programmes are also provided.
Australia is vitally concerned with the Colombo Plan Technical Co-operation Scheme. Since this scheme began, some 4,000 overseas students have come to Australia for training and, in addition, Australia is furnishing experts and equipment to other countries. At 30th June, 1961, over 900 Colombo Plan students were studying here. In addition, over 1,800 students were studying in their own countries under a correspondence scholarship scheme. Several other schemes supplementary to the Colombo Plan are in operation, including the Australian International Awards, the Asian Visits Fund, the Korean Training Scheme, Seato Aid, and, since 1961-62, the Special Commonwealth African Assistance Plan.
A major recent development is the British Commonwealth Scheme for Educational Cooperation, part of which is a Commonwealth Scholarship and Fellowship Plan, under which Australia offers 100 awards, mainly for post-graduate study. There are also other awards offered to educationists from the newer countries of the Commonwealth. As with the Colombo Plan, there is provision of experts in the educational field. This is not a one-v/ay traffic. Australia, herself, benefits substantially under this scheme since already no fewer than 82 Australians have been able to accept awards for study in universities in other Commonwealth countries.
In connexion with the United Nations Expanded Programme of Technical Assistance, Australia provides training programmes for some students holding United Nations awards. In 1961, over 80 students studied in Australia under this programme.
An interesting recent development in connexion with Australia’s international educational interests is the broadcasting by Radio Australia of English lessons for Indonesians, using material prepared by the Commonwealth Office of Education. By the end of 1961 more than 120,000 requests for regular lesson booklets were being met.
Australia’s membership of Unesco involves it not only in an annual contribution to the organization, but also in associated activities in Australia of educational and cultural importance. Many regional and national seminars have been held, and valuable studies and publications have been sponsored. These have been developed by the co-operation of a wide cross-section of interests in the Australian community and have stimulated developments in important educational and related fields.
It is not easy to draw a hard and fast line between purely educational activities and those such as the National Library of Australia, which, while having an educational role, have, at the same time, a more broadly cultural significance. Grants are made to such organizations as the Commonwealth Literary Fund and the Australian Elizabethan Theatre Trust. This kind of assistance extends to learned societies, such as the various historical societies and the Australian Academy of Science. Research activities are also assisted, as, for example, those of the Social Science Research Council. Cultural and community activities in Commonwealth territories are extensively assisted. However, the costs associated with this wide variety of activities have not here been included as educational costs.
It should not be forgotten that the Commonwealth encourages education by granting certain taxation concessions. An example of this is the deduction allowed for income tax purposes for expenses incurred (to a maximum of £100) in connexion with the full-time education of children under 21 years of age, estimated to cost the revenues of the Commonwealth about £14,000,000 a year. A further concession is the deduction allowed for each dependent child between the ages of sixteen and 21 years who is receiving full-time education at a school, college or university. This is estimated to cost revenue about £750,000 a year.
It could justly be claimed that the scope of Commonwealth educational assistance is even wider. The expansion of knowledge is one of the two main activities of the universities, and is carried on co-extensively with teaching. However, there are some Commonwealth instrumentalities which are sharing, with the universities, this exploration of the fields of human knowledge, often in close association with the universities. Amongst these are the Commonwealth Scientific and Industrial Research Organization, the Atomic Energy Commission, the Bureau of Mineral Resources, and the research establishments connected with the defence services. Expenditure on these organizations by the Commonwealth is almost £30,000,000 a year.
The table at the end of this statement sets out, for the financial year 1960-61 and, where available at the present time, for the financial year 1961-62, the expenditure of the Commonwealth Government which is clearly educational. It does not include science and scientific research, mentioned above, nor does it include cultural activities, general broadcasting and television services, the provision of milk for school children, or training activities carried out by the Commonwealth for its own purposes. These activities’ between them would, if included, account for more than an additional £46,000,000. Again, the cost to Commonwealth revenue of taxation concessions in relation to education has not been included. Leaving these aside, however, it will be seen that, in 1960-61, apart from the £85,000,000 which the Commonwealth may be said to have contributed to the States’ expenditure on education, the Commonwealth itself in that year spent over £26,000,000 directly on education. The amount which the Commonwealth may be said to have contributed to the States’ expenditure on education in 1961-62 is not at present available, but, as the attached table shows, direct Commonwealth expenditure on education in that year increased to approximately £33,000,000.
It will be seen, from what has been written above and from the tabulation which follows, that, despite the fact that education is primarily a State responsibility, the Commonwealth is making a very substantial contribution to educational expenditure in this country.
– I move -
That the paper be printed.
I ask for leave to make my remarks at a later stage.
Leave granted; debate adjourned.
– For the information of honorable senators I lay on the table the following paper: -
Cuban Crisis - Documents relating to proceedings in the United Nations, and Statements of the United States of America, Union of Soviet Socialist Republics and other Governments, 24th October to 5th November, 1962.
I ask for leave to make a statement in connexion with the paper. ‘
The ACTING PRESIDENT.- There being no objection, leave is granted.
– Two weeks ago to-day President Kennedy, in a televised broadcast, made it known to the whole world that the Soviet Union had been and was at that hour swiftly and with secrecy transforming Cuba into an important strategic base. In flagrant contravention of assurances it had given at the highest level and in face of the President’s clear statements of 4th and 13th September, the Soviet Union was rapidly constructing and equipping offensive missile sites and introducing jet bombers which would be capable of striking with nuclear weapons against North and South America. This “ clandestine, reckless and provocative threat to world peace “, as it was described by President Kennedy, took the world to the edge of disaster; disaster was averted only by the prompt and decisive action taken by the United States in conjunction with its regional partners . in the Organization of American States, by the use of the machinery of the United Nations, and by the restraint exercised by the leaders of the United States and the Soviet Union in the course of negotiations for a peaceful issue to the crisis.
It would be imprudent to assume that the situation is yet fully resolved and its dangers ended. It is, however, possible to put - events into some sort of order and perspective even at this stage. Honorable senators have been provided with copies of the most important relevant issued documents which they will wish to study and to which 1 shall refer.
President Kennedy’s actions were designed - first, to halt the build-up of offensive capability in Cuba by interdicting supply of further arms and closely watching the construction of the missile sites - with possible further action in mind; second, to make clear the consequences of the use of the offensive weapons against any American State; and third, to have the missile bases dismantled and removed under effective supervision. He was willing to negotiate but would not be diverted from his determination to eliminate urgently the threat built up by the Union of Soviet Socialist Republics in Cuba.
In revealing the awesome threat the Soviet introduction of nuclear-capable weapons into Cuba presented, President Kennedy rightly stressed the fact that modern weapons are so swift and destructive that any substantially increased possibility of their use or any sudden change in their deployment may well be regarded as a definite threat to peace. The Soviet challenge had to be met and the threat removed for the sake of the peoples of the Americas immediately and newly threatened. But not only that. Peoples in many parts of the world are allied for defence with the United States. If the United States had proved unable to defend herself and her Latin-American friends against the threat from Cuba, how much could peoples thousands of miles away, faced with similar threats and pressures, have relied on United States assurances that she would assist to defend them? The conconsequences, if the United States had shown weakness over Cuba, would have been profound and far-reaching. The confidence of free peoples everywhere would have been sapped. The Soviet would have succeeded in their monstrous blackmail and would doubtless have repeated the tactic elsewhere to provoke dissension and appeasement throughout the free world.
The Australian Government was quick to make its attitude clear. On 23rd
October, the Prime Minister made a statement in the House of Representatives commending President Kennedy’s resolute stand. In this statement the Prime Minister noted with particular approval the President’s reference to the vital importance of regional defence agreements authorized by the United Nations charter. He also welcomed the readiness of the United States to bring the matter to the United Nations.
Having been advised in a personal message from President Kennedy to the Prime Minister of the purpose of the resolution the United States proposed to put to the Security Council, i.e., to secure the complete dismantling and withdrawal of the offensive weapons, we instructed our Ambassador to the United Nations to do all in his power to support the passing of such a resolution. President Kennedy has written to Mr. Menzies expressing his appreciation of the promptitude of Australia’s publicly stated support.
There was widespread approval of the firmness of the United States’ reaction to this dangerous Soviet challenge. If part of Mr. Khrushchev’s purpose both then and in his subsequent proposals was to split the United States from its friends and allies, he was to be disappointed. An immediate meeting of the Organ of Consultation of the Organization of American States endorsed the actions initiated by President Kennedy. The Security Council met from 23rd to 25th October. Draft resolutions were submitted by the United States, by the Soviet Union and by Ghana and the United Arab Republic. The texts will be found in the collection of documents I have tabled.
There was a vital defect in the GhanaU.A.R. proposal. Their draft resolution called for mediation by the United Nations but made no provision which would ensure that the build-up in Cuba would not continue. Similarly, U Thant’s proposals of 24th October that the “ quarantine “ of Cuba, the shipment of arms to Cuba, and work on the missile bases in Cuba should be suspended to allow a breathing space for negotiations, provided no guarantees of compliance. The deliberate deception practised by the Soviet Union must be regarded as a primary weapon of Soviet strategy, and it was essential to ensure that it could not be used again. President Kennedy’s demand for verification was thus an integral and essential part of his terms for disposal of the Soviet threat from Cuba. The twelve African States which wrote to the Acting Secretary-General on 25th October recognized the importance of this gap and stressed the need for the guarantee of effective United Nations supervision.
U Thant wrote further to President Kennedy and Khrushchev on 25th October asking them, as a temporary measure which would enable negotiations to take place, to avoid confrontation at sea. Mr. Khrushchev agreed, stressing that this must be a temporary measure. President Kennedy also agreed provided that the Soviet Union also accepted and abided by U Thant’s request. However, while the risk of a direct clash was reduced by this temporary agreement, the development of the missile sites still continued rapidly. New areas were being cleared on the sites. Approach roads were being built. Missiles which had been observed parked in the open on the 23rd October were moved and cabling was observed running from missile ready tents to power generators nearby. Attempts were under way to camouflage the work that was proceeding.
Honorable senators have copies of messages exchanged between President Kennedy and Mr. Khrushchev. On 27th October, President Kennedy stated the key elements in Mr. Khrushchev’s proposals, which seemed generally acceptable as he understood them, as follows: -
On 27th October Mr. Khrushchev also proposed that the Soviet installations in Cuba should be removed in return for the removal of similar United States equipment in Turkey. President Kennedy ignored the proffered bargain. He made it clear that action to remove the offensive weapons from Cuba was the first imperative and other questions must not be allowed to obscure or delay this.
Throughout the crisis, the President concentrated unwaveringly on the particular situation at issue and refused to be diverted; but he did so without excluding future negotiation of other issues. While insisting on dealing initially only with the immediate Soviet threat from Cuba, he did not display an attitude of intransigence. The United States, he made clear, was interested in reducing tensions and also halting the arms race, and was prepared to consider with its allies any useful proposals in regard to discussing a detente affecting Nato and the Warsaw Pact; but he added that a prolongation of the discussions concerning Cuba by linking these to the broader questions of European and world security would surely lead to intensification of the Cuban crisis and a grave risk to the peace of the world.
The Soviet Government seems to have realized that the President meant what he said and that the United States would not be drawn into bargaining about extraneous questions, that delay was dangerous and that the only profitable alternative to nuclear war was a quick transition to conciliation in an attempt to reap what credit could be gained from a liquidation of their own threat to world peace. Mr. Khrushchev replied to Mr. Kennedy on the following day, 28th October. He said that the Soviet Government had issued orders for the dismantling of the weapons in Cuba which the United States described as offensive, their crating and return to the Soviet Union. It is to be noted that his formula did not admit that the weapons were offensive in character. He made it clear, however, that the weapons in Cuba were in the hands of Soviet officers.
He stated that both he and President Kennedy were ready to come to an agreement with representatives of the United Nations to verify the dismantling of the weapons. He said that the Soviet Union had stationed them in Cuba in order that no attack should be made on Cuba, and trusted President Kennedy’s statement that no attack on Cuba would be made “ not only by the United States but also by other countries of the Western Hemisphere “. He spoke also of the questions of regulating relations between Nato and the Warsaw Pact and of wider questions of disarmament and the prohibition of nuclear weapons. He informed President Kennedy that the first Deputy Minister of Foreign Affairs of the Soviet Union (Mr. Kuznetzov), was being sent to New York to participate in discussions with U Thant.
In a statement on 28th October, President Kennedy welcomed Mr. Khrushchev’s reply as “ statesmanlike “, and he wrote a further message to Mr. Khrushchev saying that he regarded his own letter of 27th October and Mr. Khrushchev’s reply of 28th October as firm undertakings on the part of both Governments which should be promptly carried out. He hoped that the necessary measures would be taken at once through the United Nations so that the United States would be in a position to lift the “ quarantine “. There was thus a reasonable prospect that the intention of the United States resolution proposed in the Security Council would be achieved outside it. The council had heard statements by the United States, the Soviet Union, the United Kingdom, and the other members of the Security Council and by Cuba, and had adjourned on 25th October to await the outcome of consultations the Acting Secretary-General had entered into with the Soviet and United States representatives. The three proposed resolutions had thus not been brought to vote.
U Thant kept in touch with United States and Soviet representatives, facilitating discussions and acting as a link between them. He also endeavoured to secure Cuban co-operation in an approach to a peaceful settlement. So far as appears, to this point of time the Cuban Government had not been consulted by the Soviet in connexion with the matter. On 26th October, U Thant wrote to Dr. Castro saying that the latter could make a significant contribution to the peace of the world by directing the suspension of construction and development of major military facilities and installations in Cuba, especially those designed to launch medium range and intermediate range ballistic missiles. Dr.
Castro replied that Cuba was willing to discuss its differences with the United States and to do everything in its power in co-operating with the United Nations in resolving the crisis. However, it rejected any violation of its sovereignty. Castro also invited U Thant to Cuba for direct discussions. On 28th October U Thant accepted the invitation and said he would bring a few aides with him and would hope to leave some of them behind to continue common efforts towards a peaceful solution. He went to Cuba on 30th October and returned on 31st October.
He reported on his return that he was satisfied that the weapon sites were being dismantled and is reported to have said since then that the United States and the Union of Soviet Socialist Republics had reached agreement on the principles for a peaceful settlement of the Cuban crisis. It is also reported that both agree that the facilities of the International Red Cross could be used for the purposes of verification. But it is not clear whether the Red Cross would be able to carry out ground inspection in Cuba or, if it could, whether Dr. Castro would permit it or any agency to do so. At this moment it does appear that work has been done on the dismantling of the bases and that verification of their removal is contemplated.
Some lessons are already beginning to emerge from the dramatic developments of the past two weeks. One derives from the speed and secrecy of the build-up of offensive weapons in Cuba, carried out at a time when the Union of Soviet Socialist Republics was assuring the United States - at the highest level - that any weapons supplied to Cuba were “ earmarked for defensive purposes “. American photographs, which Australian experts have examined, have clearly revealed the offensive capability of the weapons supplied. The deliberate duplicity practised by the Union of Soviet Socialist Republics in this regard as on other occasions in the past, is an aspect of its actions which has always made negotiations with that country extremely difficult. The fact of this duplicity makes imperative the need for verification of any proposals for disarmament, whether regional or universal. When there is no basis for trust, and the world is driven to the conclusion that there is not, stringent, foolproof safeguards for the fulfilment of negotiated agreements are indispensable. The present experience may possibly prove of great value for the future if it makes all nations realize the absolute necessity of effective verification. The Soviet Union in this case has conceded this and it is to be loped that the realism it has shown in agreeing to withdraw its missiles from Cuba under United Nations supervision will be matched by equal realism in its approach in future to the broader questions of disarmament. For its part, the West has continually attempted to reduce the area over which inspection and verification must be demanded, whenever it can be satisfied by other means that compliance with undertakings is taking place. The hollowness of the Soviet opposition to adequate inspection and verification, on the grounds that such measures are due to a Western desire for espionage in the Union of Soviet Socialist Republics, is all too plain if the events I have briefly recited are regarded.
A second lesson derives from the prompt and effective action taken by the United States to nullify the offensive threat to the Americas which was growing so swiftly and secretly. Urgent action to preserve the security of both the Americas was imperative. The United States took that action, in conjunction with its regional partners in the Organization of American States - an act in defence of the region. The Charter of the United Nations recognizes the legitimacy of regional arrangements for dealing with such matters relating to the maintenance of international peace and security as are appropriate for regional action. The action taken was necessary to deal realistically with a clearcut aggressive activity which, if allowed to proceed unchecked, could have gravely threatened the United States and its neighbours and thus international security as a whole.
In this crisis the need for and the efficacy of regional defence have been demonstrated. The United States was not alone in the action it took. All the Americas were threatened by the build-up in Cuba and responded by support of the United States action inside and outside the United . Nations. Their determination to assure their own security and not be intimi dated by the new menace of nuclear attack was an important factor in the outcome. It is hoped that the Soviet Union has taken the point that its intrusion of nuclearcapable weapons neither disrupted the unity of the American States, or of the West in general; nor inclined them to accept an intolerable situation. In fact, under threat, they came closer together.
A third and very significant lesson derives from the part so far played by the United Nations. The United States properly showed readiness to refer the matter of removal of the military bases to the Security Council. It had shown its clear resolution to have the bases removed by interdicting the delivery of further offensive weapons to Cuba. The United Nations clearly had a role to play, not merely in providing a forum in which the parties could seek to find a peaceful solution to the situation, but in itself actively promoting a basis for such a solution. Recourse to the United Nations offered a way of avoiding an armed conflict which might have escalated into nuclear war; negotiations and discussions were possible in the Security Council - a forum in which the Soviet Union, like the United States of America itself, has a special status. The United States did not regard the mere reference of the question to the United Nations as being in itself a solution or as necessarily producing a solution, and retained the right to act to protect itself and its allies if the United Nations failed to assure them of protection. However, the efforts of the United Nations, and in particular U Thant, in playing its part and negotiating a means of protecting the proper rights of all concerned and the world as a whole from war, deserve the highest praise. The strength which the initiative and determination of the President provided - a strength which the United Nations would not otherwise have had - has been used to good purpose so far and its use will, I hope, bring a secure solution.
A fourth derives from the evident absence of consultation of the Cuban Government by the Soviet. This not only points up the dependent condition into which Dr. Castro had led his people but the extent to which the Union of Soviet Socialist Republics regarded. Cuba as merely an instrument for the pursuit of its own policies.
There are grounds for hope that the immediate crisis over the introduction of Soviet missiles into Cuba will be resolved. But Cuba’s behaviour in aiding and abetting the intrusion of hostile power into the Americas and in trying to foment subversion among its neighbours suggests that Dr. Castro and his regime may still have to be reckoned with. Even if the threat of Soviet offensive weapons is successfully removed, this does not necessarily mean the end of difficulty and trouble with Cuba. The problems of, and prospects for, economic and social development in South America, notably under the Alliance for Progress, are such that all countries of the area - and outside it - should agree that disruptive influences such as the spread of militant Communist ideology should not be permitted to impede the common tasks of the people. If the economic and social progress we all desire is to be made, it will be necessary for all to resist such disruptive influences by continuing to show the firmness of purpose and restraint which was demonstrated in the crisis over Cuba.
We should also bear in mind the need for vigilance in other parts of the world. Declarations of Soviet desires for “ peace “ and willingness to negotiate for the settlement of wider problems give some hopes for progress in these regards. But there can be no guarantee that the Soviet Union, or other members of the Communist bloc, will not again seek to gain an advantage before or in the course of negotiations that may take place, in an effort to achieve a position from which they might hold the world to ransom. Caution and vigilance will be required until acceptable solutions to the broader questions affecting the peace and security of the world are found.
This does not mean that Australia will not enthusiastically support every bone fide move for the relief of tension and for general and complete disarmament and in the meantime for the cessation of nuclear testing. Australia will continue to do so, but it does mean that every proposal must be examined realistically and due safeguards for performance insisted upon at every stage.
Meanwhile, we may hope that - if the Cuban crisis is successfully resolved, and we are not yet out of the wood - its resolution may give a new impetus to the search for solutions to these broader questions. The realistic appreciation of American determination shown by the Soviet leaders and their readiness to respond to it could perhaps offer some hope of this. The most important thing now is for the Cuban bases to be dismantled, under proper inspection, in an orderly and systematic way, avoiding further East-West clashes. If this can be done I myself would not exclude the hope that the atmosphere in future may show some improvement over that in the past.
I move - j
That the paper be printed.
Debate (on motion by Senator McKenna) adjourned. ^ 11.*
Debate resumed from 3rd October (vide page 644), on the following paper presented by Senator Spooner -
Tariff Board Act - Annual Report of the Tariff Board, for year 1961-62, together with a summary of recommendations.
And on the motion by Senator McKenna -
That the paper be printed.
– The motion before the Senate gives us an opportunity to review the annual report of the Tariff Board for the year 1961-62. I note that the report is dated 28th August. We have an opportunity now also to address some most important questions to the Government on matters arising from the report and which in any case are connected with it. By way of a very brief review, I refer to page 4 of the report and the tables published there which indicate that there was a large increase in the number of references to the board in the past two financial years. The number rose from 43 normal references in 1959-60 to 59 normal references and eighteen section 17a references in 1960-61. The total under those two headings in 1961-62 was 74, including 53 normal references and 21 section 17a references. The board reports in paragraph 4 of its report that there were some 61 normal references signed by the board in 1961-62. In addition, 25 reports on section 17a references were signed by the deputy chairmen during the year. It is a tribute to the Tariff Board that all but one of the recommendations in the 61 reports were accepted, the exception being portion of the recommendation regarding chlorine products, which were referred back to the board.
In paragraph 5 of the report, attention is directed to the time-lag in dealing with references. It is noted that the time has fallen substantially in recent years, and that in 1961-62 the lag was ten and three-quarter months. It still is a very long time. On that point, I refer to the reference by the Tariff Board to the shortage of staff. At page 26, paragraphs 252 and 253, the board, which drew attention to this matter in its previous report, made this statement -
The staff shortage, mentioned in last year’s report, has not yet been overcome. At 30lh June, 1962, the total actual strength of the work force in the project section was approximately two-thirds of the establishment. It was necessary for a number of officers to work long hours of overtime during the year. Adequate staff is essential.
At present the staff of the Board is part of the staff of the Department of Trade. Existing arrangements, particularly as regards the recruitment of staff, have proved cumbersome in practice and there have been delays in the filling of vacancies. The Board considers that, for this and other important reasons, there would be advantages if the Tariff Board staff were a separate establishment.
I know the Government and the Parliament have taken steps to add to the number of members of the Tariff Board and to speed up their work. It would appear from the report of the board that there is need to strengthen the staff. It cannot be satisfactory to any industry to find that there is a time lag of ten and three-quarter months between the date a reference is made and the date upon which the board’s recommendation is available. From the time the report is received until it is acted upon may still be a matter of months. It would appear that the great factor in the delay now lies in the shortage of staff.
– But not the only one, as the honorable senator will see if he looks at paragraph 52.
– I am not suggesting it is the only reason, but it is one of the factors at least. In paragraph 52, as Senator Wright has reminded me, the board refers to the delay on the part of witnesses and applicants in supplying the information required. Unfortunately, that has been rather a chronic complaint of the board down the years.
– Why cannot the board fix a time limit for persons to supply information and evidence instead of keeping industry waiting?
– That is a cure that lies in the hands of the board without a doubt; but apart from that there is a great deal of investigation to be undertaken. My first question to the Government is this: What is the reaction of the Government to the proposal in relation to staff? The board raises a matter of great principle to the effect that it should get away from Public Service control and that its staff should be recruited as staff is recruited by many outside Commonwealth instrumentalities. I presume that the Government has addressed its mind to the contents of the report, and so I ask first what it has decided on that particular proposal. I would assume that it has given consideration to the matter. I refer now briefly to the reasons for the great increase in the number of references to the Tariff Board. The first, of course, would be the lifting of import restrictions in February, 196Q, which brought a flood of imports in its train and certainly affected industries that had been built up under the protection of import licencing - a system that had operated from March, 1952, for some eight years. One factor was undoubtedly the sudden removal without warning of import restrictions on so many commodities.
– Industry had five years’ warning that import restrictions were to be lifted.
– The Minister for Customs and Excise, who has interjected, could say that industry was warned, on 8th March, 1952, that those controls were to be temporary; but when industry finds that what is termed “ temporary “ extends for a period of eight years, it does not take much notice of a warning but looks at the facts.
– Industry had only to look at the balance of payments.
– Those concerned had a look at the facts and found controls running on year after year until all of us began to regard import, licensing as an accepted part of life despite the Government’s protestations. It may be that there are some of us who think that import restrictions should have been preserved. I am among those who do. While our balance-of-payments position shows a happy result on occasion, my own view of the whole economic situation, particularly as it may develop in the future, is that we are vulnerable, as I have said many times in the Senate. Even if we are not using import restrictions all the time, at least we need to have the machinery there for them.
– Will you make a reference to paragraph 45 while you are discussing what the board says in regard to import licensing generally?
– Yes, and I admit the legitimacy of what the board says. Senator Wright directs my attention to paragraph 45, which states -
As in the previous year, the Board noted several industries which, having commenced production behind the shelter of import licensing or having expanded into unprofitable areas of production, were unable to compete with imports with the assistance of a reasonable level of protection.
Of course, what is a reasonable level of protection is a matter of judgment in each particular case, and judgments emanating from different sources might give a different result. 1 hope to say something, before I conclude, about the principles upon which the board works and upon the Government’s tariff policy generally, but I should not like to advert to those matters just now.
The report, in chapter 2, deals with the economic background. What is stated there is informative and of more use, I should think, to those who have not ready access to budget information and Commonwealth statistics such as we members of Parliament have. I select only three paragraphs for comment. In doing that, 1 may not do justice to what the board has said, but my interest is stimulated by the three paragraphs in particular. Paragraph 17 reads -
Employment in manufacturing has not yet recovered to its former levels. Al 30th June, 1962, employment in manufacturing stood at 1,181,000. This was more than 20,000 below the number in November, 1960.
I take it that the board in citing that date - November, 1960 - had due regard to its significance. That was when the Govern ment’s restrictive and coercive measures were put into effect. One cannot regard with any equanimity a situation in which the numbers employed in manufacturing have fallen in recent years and have not yet been restored even to the level of two years ago. One’s concern is strengthened by the prospect of many school-leavers coming onto the labour market within the next few months. So it is not a bright outlook for our employment position and the engagement of our work force to find manufacturing employment levels not holding their own. Upon the employment of our people depends our development, our standard of living, and the happiness of a very great many people. So that is not a cheering prospect to contemplate.
In the latter part of paragraph 24, the board states -
The need for stimulating and diversifying exports, which has been emphasized by the Board in previous reports, remains important.
In other words, there is still a need to stimulate and diversify. The paragraph continues -
Evidence received by the Board at inquiries during the year shows that the Government’s export incentive scheme has assisted towards this end.
That is true. It gave certain stimuli and no doubt these have had some effect, but I direct attention to the board’s comment that the need to stimulate further and to diversify exports further is still important.
So I come to the second question that I address to the Minister. What thought has the Government given to that clear suggestion from the board for further stimulating and, above all, for diversifying our exports? I do not have to argue to the Senate that we face rapidly changing conditions and an uncertain position in the years that lie ahead. We shall have to make many adjustments and it is quite certain that diversifying our exports will be one of them. So I should like the Minister, when he replies, to comment upon that paragraph.
Lastly, I refer to paragraph 27, which deals with the terms of trade. From the statistics supplied by the Reserve Bank of Australia, it appears that our terms of trade have consistently worsened. Taking together the general effect of our exports and imports, and looking at the terms of trade, the position has deteriorated from a base figure of 100 established in 1953 to a provisional 66 in 1962. That is certainly not a happy position, and it reinforces what I said regarding the chronic nature of our difficulties with balance of payments.
– To what is that chiefly due? Is it not the internal cost?
– No. I suggest - and I think that the board agrees with this view - that it is rather due to the fact that prices for our exports have fallen.
– In relation to cost of production here.
– No, in this context in relation to the increase in the price of imports. If the honorable senator will look at the table, he will see that it states the export price index and the import price index, and reflects the terms of trade, having regard to the variations in prices of exports.
– Is it not import price adjusted to local cost of production? Is not the cost of production the dominant factor?
– No, I would not agree with that, and I do not think the board puts it on that basis. The outstanding fact is that whilst the bulk quantity of primary production and bulk exports have grown quite appreciably down the years, the return for them has fallen, due to the prices that are available. I think that that is the dominant factor in the situation.
– Paragraph 28 makes pretty clear what the board thinks.
– Yes. Paragraph 28 deals with wool, wheat and meat and the percentage variations in prices. Elsewhere in the report, I think, is a reference - I cannot refer the Senate to it forthwith - to the effect upon our balanceofpayments position of the fall in the prices received for our exports.
I should. like to deal with those sections of the board’s report that set out the principles upon which the board acts. I turn to page 7 of the report. Paragraph 36 states -
The Board is aware of the particular difficulties facing those sections of primary industry which must compete in world markets and takes them into account in the course of its examination of requests for tariff protection on goods which have an important cost incidence for primary industry.
So there is one broad principle - concern for the primary industries upon which we are so heavily dependent for our balance of payments and for our imports. The next section to which I refer is paragraph 37 which reads -
Another matter of concern to the Board is the question of the cost implications for manufacturing industries of requests for protective duties on raw materials and semi-processed goods. Manufacturers frequently appear before the Board opposing requests for protective duties on such goods when they believe the accord of protective duties will increase their own production costs and jeopardize their competitive position. The Board gives due weight to these considerations when examining requests for protective duties.
I merely mention these principles at the moment. I propose to come back to them presently. The board has regard to excess capacity. In paragraphs 54 to 57 of its report the board points out that there was excess capacity in quite a number of industries. It admits that that position may be due to miscalculation on the part of an industry or to employment of new techniques that lower costs but involve the establishment of a high industrial potential, leaving some of it unused. The board takes the view in other cases that a mistake has been made in surveying the needs of the market or that competitive capacity with local or international firms has been overlooked or miscalculated. The board finds that unused capacity representing a fixed charge on production costs adds heavily to costs and in circumstances where the board does not think it is proper to do so, it does not allow the whole of those costs to be passed on to the consumer. The board has regard to that fact at least when it is affording protection.
– Does the board instance any cases of excess capacity?
– No particular cases. In paragraph 54 the board makes the general comment -
The Board found excess capacity in a number of industries which it reviewed during the year. The extent of the excess capacity varied widely. In some cases the effect on costs was considerable.
If the honorable senator is interested to obtain the particular details, I think he will find them in the manufacturing statistics issued by the Department of Trade. The information is there recorded in rather considerable detail. Speaking of manufacturing industry at large, the latest statistics that
I saw indicated that only 80 per cent, of industrial capacity was used. Generally 20 per cent, was unused. That 20 per cent, was expressed as being capable of providing employment in Australia for an additional 100,000 persons at least.
– For how many years’ expansion does that cater?
– Not very long, but if we are to have a policy of full employment, industry must all the time be expanding. Otherwise we run into the kind of trouble that we have had in the past two years. Industry has not expanded very appreciably recently because of what is now recognized as lack of confidence throughout the business community. That lack of confidence has afflicted us for the past two years.
In paragraph 246 of its report the board states that an industry must be economic and efficient. The board quotes with approval Mr. McEwen’s remarks in this connexion. I merely refer at this stage to that principle. I hope to come back to it later.
In paragraphs 58 and 59 the board directs attention in quite stringent terms to restrictive trade practices, which it particularizes to quite a degree. The board states -
Excessive retail prices, which include unreasonably high profit margins, are not, however, always associated with restrictive trade practices. The Board has noted a number of cases during the year where retailers appeared to be taking extravagant margins. Practices of that nature could well have the effect of reducing such public benefit as may accrue from reductions in the cost of imported or locally manufactured goods.
In paragraph 122, dealing with petroleum products, the board points out that it is not the function of the board to determine prices. We can accept “ that as the position with the board. But, surely, with a report of that nature before the Government, it behoves the Government to take some action to correct the position which, if not corrected, could completely subvert the whole idea of protection, as the board itself points out.
– How do you reconcile the fact that Coles made a profit and Anthony Horderns incurred a loss?
– I am not familiar with the figures. Two propositions have now been put to the Government. One concerns restrictive trade practices. In this regard we have heard from the Government, year after year for the past three years, that action was being considered. Nothing has been done. Now that the Tariff Board directs pointed attention to the development of restrictive trade practices, even if the Government were not aware of them after three years of inquiry, it should now become active and do something about the matter. It cannot shelter behind what States may do or may propose to do, because States are completely limited in their activities to intra-state trade. Without the fullest co-operation between the Commonwealth and the States it may well be that nothing effective can be done until this Parliament is armed with adequate power. It may be that the Constitution will have to be changed. On that point again the Government has had notice since November, 1958, when the Constitutional Review Committee unanimously - or at least by a majority of eleven out of twelve members - recommended that the people should be asked to give the Commonwealth power to legislate against restrictive trade practices. But this Government has sat by for four years with that recommendation before it. Now it has had its attention specifically directed to this matter by the1 Tariff Board - a board for which it has, and has expressed, the greatest respect. The matter is now clearly up to the Government. On behalf of the- Opposition I ask: What is the Government proposing to do about controlling restrictive trade practices referred to in the reports of the Constitutional Review Committee and the Tariff Board?
I suggest that the Government pay some regard to what is said by the Tariff Board about excessive retail prices. If the Government is doing its duty by the people of Australia it must pay heed to the complaint, in effect, that is made by the board in its report.
I would like to deal now with “ close! out” sales, which are referred to by the board in paragraphs 60 to 62 of its report. The board reports that it received evidence of imports being purchased overseas at “ close out “ prices, that is, at prices which have been reduced below usual levels, both for the home and export markets, to enable the clearing of goods at the end of a run of production. The board points out that this practice presents a real problem. The practice is obviously one with which the board is not at present adequately armed to cope. I recognize that, the Government has faced this matter to an extent in that recently it armed its Special Advisory Authority with power to recommend quantitative restrictions on this kind of activity. There is a bill before the Parliament now which has for its purpose the conferring for the first time on the Tariff Board of power to recommend the imposition of quantitative controls for a specified period. I note with interest this comment by the board in paragraph 62 of its report -
Whilst it is appreciated that real technical and administrative difficulties could be involved, the Board notes that some apparent success has been achieved by the Canadian authorities in dealing wilh “ close out “ sales and other special problems and suggests that consideration be given to the possibility of the adoption of similar measures in Australia.
I pose. three more questions to the Minister. Would he be good enough, when opportunity offers, to tell us just what methods are being applied by the Canadian authorities? Have they been investigated by the Government? Does the Government accept or reject the suggestion that is made by our own Tariff Board? 1 noted that on 17th October last, in announcing the proposal to appoint a committee of economic inquiry, the Prime Minister (Mr. Menzies) dealt at considerable length with the position of the Tariff Board vis-a-vis the Government. It is pathetic to see the spectacle of a government, after thirteen years in office, posing nine major questions, embracing almost everything of consequence in the Australian economy and referring them to some gentleman in the community. He is to be asked to advise the Government, not only on how Australia is going now, but also on where it is to go in the future. I would have thought that thirteen years of experience . would have armed the Government with some certainty in this matter, and that we would have had some leadership from it. However, instead of giving leadership, it is asking the people of the nation to tell it what to do. I would have thought that, the Government would be leading, indicating goals and objectives, and steering the nation towards well-defined ends. Instead, we are faced with this pathetic document, which, in my view, is just an alibi - an excuse for not taking the action that is called for in face of the new economic circumstances facing Australia. It is depressing to find a government, after so long in office, having no thoughts of its own, or, if it has got them, not being prepared to put them before the nation
What are the matters for inquiry? The last of the nine is -
The effect of customs tariffs and other forms, direct or indirect, of protection on the disposition of resources and on the broad economic objectives stated above.
What are those broad economic objectives? The Prime Minister said -
Having in mind that the objectives of the Government’s economic policy are a high rate of economic and population growth with full employment, rising standards of living, external viability, and stability of costs and prices, to inquire into and report its findings on the following matters. . . .
One cannot argue with those objectives; everybody in the country would agree with them as objectives. But what the Opposition asks is this: What methods and policies will be pursued by this Government to attain those objectives? That is the positive inquiry that I make on behalf of the Opposition.
I should like to refer very briefly to the rather lengthy dissertation by the Prime
Minister on the subject of the Tariff Board. He said -
The Government wishes to make it clear that it has the firmest intention of preserving the full independence of the Tariff Board as an advisory body established by Parliament. . . .
There is no quarrel with that. In the next paragraph the Prime Minister went on to say -
The Tariff Board is, to repeat, an advisory body. It is not a policy-making body - although its recommendations necessarily have a considerable influence on policy - and it is not an executive body.
I agree with that proposition. I also agree with the Prime Minister’s proposition in the next paragraph. He said -
But tariff policy as such is the responsibility of the Government.
Clearly it is. In the last paragraph of the statement the following appears: -
Tariff policy involves broad issues of principle - how far one class of industry should be encouraged by protection, as compared with other classes of industry, whether diversity of industry should be sought or specialization, what relative weights should be given to the effects of tariffs on costs generally, on rural incomes and on consumers, how far international reactions to tariff increases should be taken into account and so on.
I make two comments about that. Of course tariff policy is a matter for the Government. Of course it is something for the Government to announce. The Prime Minister has mentioned only the broad issues that are involved, but we of the Opposition want to know the Government’s thoughts in relation to these matters. The Government, like the Tariff Board, is faced with the very difficult position of having before it many conflicting interests. It has to consider the consumers, the importers, the manufacturers and the primary producers. In the community there are all kinds of interests that cannot be reconciled, and decisions have to be made. The fact that those decisions are difficult to make does not justify avoiding them. The Reserve Bank of Australia faces up to its responsibilities in the matter of the finances of the country. It does not hesitate to tell the private trading banks to expand this activity- to expand an industry that helps our exports - or to contract another activity, such as hire-purchase activity, when too great a demand is made on capital goods in the country.
– How can you say that the Government has not been specific in this matter, having regard, firstly, to the Japanese Trade Treaty, and secondly, to the special emergency authority that was established earlier this year by special legislation?
– I answer the honorable senator by referring to the Prime Minister’s own distinction. He has said that the Tariff Board is merely an advisory body, lt is bound by policy laid down by the Government. I am asking: Where, in general terms, is there any clear statement for the edification and guidance of all these conflicting interests in the community?
– Surely it is given in tariff protection for efficient industries, and it is printed in every Government policy speech.
– If the honorable senator is satisfied with a mere statement that protection will be afforded an industry that is economic and efficient, I would not be so satisfied. There are many questions remaining. Upon what principles is an industry determined to be economic? Is regard to be had to the needs of the manufacturer or the consumer? What norm is taken for determining efficiency? Is regard to be had to international standards? If so, what standards?
– Do you suggest that the Government should declare for a policy of affording protection to an inefficient industry?
– Not at all. The Government should be prepared to give an indication of what it regards as an efficient industry. What norms or standards are to be applied by the Tariff Board? It is of no help to the Tariff Board, to the business people or anybody else in this country, to say that an industry has to be economic and efficient and then leave the matter for the Tariff Board - a mere advisory body - to work out.
My general criticism on this particular point is that no proper guidance has been given by the Government to the community. Even in its statement of objectives I find a grave deficiency. I should have thought that in defining its broad policy objectives one of the first things the Government would have looked at would have been the security of the country. Nowhere in the Tariff Board’s report, or in the Prime Minister’s statement outlining the objectives, is there any mention of this matter, which I regard as primary and fundamental. Is Australia, as an island continent with vulnerable sea lanes, producing the things that it would need in war? War is in the atmosphere. Are we producing strategic materials? Have we the industries that we would need if we were left to our own resources in a time of war? Surely that is a duty of the Government, but it was not even mentioned by the Prime Minister. The Tariff Board has no duty to advert to it; but surely the Government has. Is not this the very first thing that the Government ought to say: “ We must have this industry, and if we have to make a sacrifice we will do without that industry “? That is leadership. That has to be done if the Government is to face up to its responsibilities.
Somebody in the community has to determine what is important and what is strategic. We cannot wait until war is upon us and we find that our normal import sources have dried up. It rather frightens me to find that that thought was not adverted to at all in the statement made by the Prime Minister. Frankly, I believe that in determining what industries have to be brought into being, what industries have to be helped and the diversification of industries somebody has to lay down an order of priorities. Surely in that order the first industries would be those that are vital to our defence structure and supply.
All the way through the statement one finds perfectly broad principles enunciated by the Government. How they can be any useful guide to the Tariff Board I do not know. The burden of my speech to-day is to direct attention to that matter and to indicate to the Government that it should take the lead. It should not seek to avoid taking action by throwing a vast question such as this on to a hitherto unnamed body which is to be constituted a committee of economic inquiry. The relevant announcement was made on 17th October, 1962, three weeks ago. I think I am right in saying that the personnel of that body have not yet been mentioned. That is one more example of the inactivity of the Government. I do not know how a committee of inquiry in any reasonable time will be able to bring in well-considered findings on the vast nine questions that have been submitted to it. There is not only the whole question of the effect of the Tariff Board on the economy but also the fourth matter on the list, namely overseas investment in Australia including likely sources and trends and an assessment of its significance to the Australian economy. Of course, that is important.
– How does that come up in relation to the report of the Tariff Board?
– It comes up in this way: It is very relevant to the matters that I am now discussing, such as the protection of industries. Because the Tariff Board is one agency which should ensure that Australia has the types of industries that it needs, there should be some kind of control to ensure that investment that comes into this country is designed either to pro vide goods for export and to stimulate our exports or to provide opportunities for import replacement. We have a vital interest in conditioning and determining the flow of investment into Australia. I suggest that we also have a duty to ensure that the control of Australian industry does not pass largely out of Australian hands. All those matters are immediately connected with the protection of Australian industry. I believe that they are allied matters. That is my reason for referring to the committee of economic inquiry.
In the report, as I read it, I see a board doing a magnificent job with limited resources and making recommendations, but like the rest of the Australian community left without clear guidance on many points of great principle. I see a government, instead of laying down those principles, asking a hitherto unnamed body to do that for it. Frankly, I confess to feeling depressed about it.
– Did you find in the report by the board any reference to the effect of section 17a inquiries on its independence?
– No, I did not find that. The report contains two bodies of references for the two years 1960-61 and 1961-62. In 1960-61, there were eighteen references under section 17a, and in 1961-62 there were 21. In 1960-61, there were fourteen references under section 17a signed by deputy chairmen, and in 1961-62 there were 25. That makes a total of 39. Of course, as Senator Wright knows, that procedure was supplanted by the new provision for a Special Advisory Authority in February this year. The honorable senator may be right in thinking that some conflict is developing between the Government and the Tariff Board over the Special Advisory Authority.
– Great concern about it was expressed in another place. That is why I wondered whether this report adverted to it.
– No, it does not. I do not know what has happened in another place, to which the honorable senator has referred; but on the front page of the “ Australian Financial Review “, issued to-day, I find an article that relates to this point. The heading on the article is “ Resignation Mooted. Tariff Board Moves May Point to Policy Changes.” The article directs attention to .the fact that the Special Advisory Authority has dealt with about 28 matters up to date and that in respect of the decisions that ultimately have been dealt with by the Tariff Board the measure of protection afforded by the Special Advisory Authority has not been supported on a permanent basis by the Tariff Board. The article suggests that there is a conflict between the Government and the Tariff Board on that matter. It suggests that a senior member of the Tariff Board - he is unnamed - is about to resign as a result of that conflict. I know no more of that matter than what I have read in this newspaper.
– The Minister for Trade (Mr. McEwen) made a statement about it in the House of Representatives this afternoon in answer to a question.
– Did he? I missed that.
– This is the last interjection I will make. I refer to the last sentence in paragraph 246 of the report. That sentence would seem to indicate that the board does not regard the Special Advisory Authority as an undermining of its independence.
– In fact, I referred to that paragraph in a different context. I did not look at it as forecasting any illfeeling or conflict between the Special Advisory Authority and the Tariff Board. Now that my attention has been directed to that paragraph again, I would say that the board is affirming its position as the final determining authority.
– On that criterion.
– Yes, on that criterion. The board will apply the normal criteria, namely, that an industry should be economic and efficient. That is right.
– There has never been any doubt about that, has there?
– I would think not. I would be interested to learn from the Tariff Board or the Government how it is determined that an industry is economic. Is it economic from the viewpoint of the particular industry or from the viewpoint of the nation? What are. the principles? I do not see them laid down in detail by the Tariff Board; nor. are they laid down in detail by the Government. I should like to know more about the principles on which the board works.
I conclude by saying that I find the report interesting. I am surprised to find how much time I have taken in this speech. I intended to speak on this matter only very briefly. I must blame a little those honorable senators who have prompted me by interjections. I think interjections and replies to them give interest and point to the discussion.
Sitting suspended from 5.45 to 8 p.m.
.- I say at the outset that it has always seemed to me that the Tariff Board has a most complex and intricate function to perform. So far as it is humanly possible to do so, the board must understand the economics of all the various industries that come before it for protection. It must be conversant with the cost structures of those industries, and it must have a knowledge of the competition to which they will be subjected. What is probably more important than anything else, it must strive to hold the balance between the industries that apply for protection and the Australian consumers. It must consider the effect upon all sections of the community of any decisions it may make. I was glad to see that the board referred in its annual report to the effects that its decisions could have upon primary producers. It drew attention to the fact that if the cost structure of the primary producer is increased, as it has been, then not only is a potential market for manufactured goods in this country reduced but a burden is imposed upon the greatest export earner in Australia. Because this independent body is continually sitting in judgment of industries which closely affect the Commonwealth, and because it is continuously inquiring not only into the ramifications and economics of various industries but also into the effects that its decisions might have upon every section of the Australian community, this Parliament should take full cognizance of its reports.
I listened with a great deal of interest to Senator McKenna’s speech. He referred to the fact that the time lag between the date of an application to the board for protection and the date of the board’s report thereon had been reduced from fourteen and a half months to ten and three-quarter months over a period of years. The criticism that I have to offer - it relates to only a minor matter which probably has little effect upon the time lag about which I have been speaking - arises from the board’s statement in these words -
The Board finds it difficult to understand the attitude of several applicants for protection, who appeared before it during the year, to whom it was necessary to send repeated requests for data which the witnesses had undertaken to submit to the Board.
It seems incomprehensible that an industry which is applying for protection should be neglectful or careless in supplying data that it is essential for the board to have if it is to arrive at a decision. I agree with the suggestion made by way of interjection by Senator Wright that a time limit should be imposed in this matter.
I think it can be said that Senator McKenna was mildly critical, not of the board but of the Commonwealth Government, when referring to certain aspects of the board’s report. One grievance he voiced was that the Government offered no guidance to the board in deciding whether an industry was economic or not. It would seem to me that it would be neither feasible nor practicable for the Government to lay down a hard and fast rule that the Tariff Board would have to follow in deciding whether an industry was economic or not. Surely to goodness, within certain limits, that should be a matter for the discretion of the board itself. Indeed, I think the board answers that criticism by Senator McKenna when it says that in several cases it was found that industries that had sought protection had been sheltering behind import licensing, and as a consequence had become uneconomic. The board was of the opinion that they could not function even with a reasonable degree of protection. I take it that because the board held this opinion protection was refused.
It has been suggested often in this chamber by Senator Wright and others that import licensing represented a second line of defence, tariff protection being the first. I suggest that they were speaking mildly then, because there is no doubt that import licensing represented the first line of defence for some industries. It led to the building up of a system which fostered inefficiency.
Senator McKenna referred to the fact that the board states that there are not now so many people employed in secondary industries, and he quoted this paragraph from the Tariff Board’s report -
Employment in manufacturing has not yet recovered to its former levels. At 30th June, 1962, employment in manufacturing stood at 1,181,000. This was more than 20,000 below the number in November, 1960.
In paragraph 24, the board went on to say -
Manufactured products made a valuable and increased contribution to export earnings in 1961-62, the most notable achievement being an increase of £15,000,000 in exports of iron and steel.
I do not think there is any doubt whatever that after import licensing was abandoned some of the dead wood had to be pruned from those industries which had carried on in an inefficient manner under the protection that import licensing afforded them. A greater degree of efficiency had to be fostered in those industries. Although this resulted in some curtailment of staff, I say without hesitation that it also resulted in placing these industries in a better position to engage in export production for the benefit of the Commonwealth. I think the Leader of the Opposition said that 100,000 more people could be employed if the excess capacity in secondary industry were used. For more than 60 years we in this country have been able to export our primary products. We have been fairly certain of a market of 50,000,000 people on the other side of the world, but it was reasonable to think that sooner or later that market would suffer drastic curtailment. Surely no one envisaged that it would last for ever. With or without the European Common Market, there had to be some readjustment. Before the entry of the United Kingdom into the Common Market was even mooted there was a falling off in our exports to that country. The pattern of trade is changing. It is certain that we cannot go on for ever depending on the export of primary products to pay for the imports that are so necessary for the development of this country.
It has been claimed so often, with a lot of truth, that secondary industry is the biggest employer of labour-
– But not the greatest developer of the country.
– I agree. If we continue to industrialize we must reach the stage where additional export markets will have to be found. It seems to me to be perfectly certain that we cannot go on for ever exploiting the local market so far as secondary industries are concerned. As one man has put it, when the demand is satisfied you cannot turn round and sell the products back to the machines that made them. It seems to me to be elementary that if we are to continue to increase our industrial capacity, markets overseas will have to be found. Not many nights ago I saw on television business people who were going overseas being interviewed at Mascot aerodrome. One of them said: “ We have to find overseas markets for our manufactured goods so that we can use fully the plant and staff at our disposal. If we do not find them, we are going to use only a part of our capacity for production, because the Australian market is not big enough by a long way to absorb all we can produce.”
With increasing industrialization, that position will worsen unless we are able to compete with the rest of the world. In that connexion, the Tariff Board has stated in its report -
Australia is heavily dependent on international trade-
Every one knows that - and her ability to export to. highly competitive markets depends essentially on internal costs and prices not increasing more rapidly than costs and prices overseas.
– That is the paragraph after the board’s reference to terms of trade.
– Yes. In the preceding paragraph the board states that our prices overseas have suffered a continuous downward trend and that, whereas in’ 1953 the terms of trade stood at 100 - taking that as the base year - in 1962 the provisional estimate is 66. So, there has been a substantial fall.
To that must be added the fact that costs to the greatest exporter, the primary producer, have gone up almost in like proportion. If that trend continues, the position will be reached where the profit margin is so narrowed that there will be practically nothing left. In fact, that position has almost been reached. It is a good thing to see that this board takes cognizance of that fact. It is aware of the particular difficulties facing those sections of primary industry which must compete with world markets, and it has taken those difficulties into account in the course of its examination of requests for tariff protection. It does me good to see that the board has done so. I regret very much indeed that other primary industry bodies in this country do not see the economy in the same perspective, because it seems to me that we cannot go on for ever increasing costs without pricing ourselves out of the markets of the world and without incurring dire consequences in the end.
It has been said so often that the £800,000,000 worth of goods that come into this country must be paid for. Fundamentally, there is only one way in which they can be paid for, and that is by exports. If something is done to retard the flow of exports or to place export industries in an uneconomic position so that their profit margins are reduced, there must be a decline in the production of commodities which it is essential for us to produce in order to maintain our earnings from exports.
– There is an increase in the amount of wool being produced, but the price is not high enough on the world market to balance our trade.
– There is an increase in the amount of wool being produced. I am one of those who believe that it may well be true that world prices have levelled out. It will be a very long time before we see any significant increase; but the trouble in this country is that our cost structure is out of line with world prices.
– Whose fault is that? You people let inflation run riot.
– I can tell Senator Kennelly where the trouble lies, but he would not agree with me. I think it lies partly in the unrealistic decisions of the Commonwealth Arbitration Commission. I do not think that wage increases in one industry or another are any good at all unless they are accompanied by increased productivity, and particularly export productivity! - Reference has been made to the committee that is to inquire into the economy. The Government was roundly criticized for its decision to set up this committee. It was said that the Government should know all the answers to the questions posed in the terms of reference of the committee of inquiry - that after its long years in office, it should not need to inquire into these things. In another category, I have heard this Government roundly condemned because it has not set up a permanent committee to advise it on a plan for the development of Australia. Surely the information sought - whether it be used or not - would not be wasted. My complaint is that the terms of reference of the committee to inquire into the economy do not go far enough.
The Tariff Board refers to costs and prices in its annual report. At paragraph 33, the board states -
Assuming comparable movements in productivity, the greater stability in Australian prices and wage rates during the year under review, as compared with price and wage movements overseas, should have improved Australia’s competitive Position in international trade.
The board indicates in its report that prices have been made comparatively stable, but One wonders what the position would have been had import licensing not been removed and if action had not been taken two years ago and since then to try to Stabilize the position. It is certain that if that had not been done the Tariff Board Would not have been commenting in this fashion upon Australian productivity. I have no doubt that the cost structure would have been considerably higher and Australia would have been priced out of more of its export markets if the Government had not acted as it did two years ago and since.
The emphasis in the Tariff Board’s report is on secondary industry. Commonwealth and State governments seem bent upon fostering secondary production and industrializing the rural sector as far as possible. This seems to me to be a tragedy having regard to the food position all over the world. Many millions of people throughout the world are under-nourished. Statisticians estimate that the world population will double and probably treble within a few years. Yet in spite of our potential food production, in spite of all our disabilities and the world economic situation, we are prevented from providing the food to the people who need it most. One wonders how long this position will exist. Only recently, an authority estimated that the world’s population had increased by 400,000,000 in twelve months, but the same authority stated that there was no indication that food production had increased. Unless the world can ensure that the under-developed and undernourished countries can be boosted to a position where they provide a market for excess food production, sooner or later we must reach a climax.
I welcome the report of the Tariff Board. It brings to light many truths about our economy for those who are willing to learn. If we are to retain Australia, we must get down to a reasonable cost basis so that we can compete in the markets of the world. It would be quite all right to continue to increase costs if Australia could be isolated from world trade, if Australia were entirely self-supporting and did not have to import anything. But we are one of the great importing countries of the world and therefore we must also be one of the world’s great exporters. If we are going to export, it is certain that we must get down to a reasonable cost basis. If we can do that we need not fear the future.
I have said in the Senate before, and I have got myself into trouble for saying it, that there is no ill afflicting Australia that cannot be cured by hard work. As long as the people are prepared to produce a reasonable output to allow us to compete on world markets and to go on developing, we need not fear the future.
.- One must agree with many of the suggestions that have been put forward by Senator Lillico. He began by complimenting the Tariff Board on its independence and he agreed with the proposition of the Leader of the Opposition (Senator McKenna) that when an industry seeks protection, a time limit should be imposed on the relevant inquiries. I do not think that any one would disagree with the imposition of a time limit. The honorable senator said, in effect, that protection should not be given to an uneconomic industry. That, of course, would require some thought. Not long ago the report of the Dairy Industry Committee of Enquiry, which was under the chairmanship of Mr. McCarthy, for whom we all have great respect, was before this chamber. Speaking from memory, I think the report stated that about15 per cent, of Australian dairy farms were uneconomic. Every industry must have a chance to grow but if, after a reasonable time, it is found to be uneconomic, its position should be considered. The term “ uneconomic industry “ is open to very wide interpretation. One person might say that an industry was uneconomic, but another would say that in view of the number of people the industry employed and the wealth it gave to the nation, it should be given a reasonable time to place itself on an economic footing.
I agree with Senator Lillico that it is easy to be wise after the event. In respect of the European Economic Community, the present time is after the event. If anybody had foreshadowed, five or six years ago, the situation in which we find ourselves to-day, he would have found very few listeners in this nation. If this country is to prosper, if it is even to live, it must face up to the situation. From the reports given to us by members of both sides of the Parliament who have returned from overseas, it appears that by about 1970 we shall be on our own to a large extent. That prospect may alter as a result of negotiations, but that is the way the situation appears to the ordinary man in the street. Unless we go out and get markets, we shall find ourselves in a position of which we never before dreamed. Senator Lillico complained - as he has often complained, and as we all complain - about the price structure, but honorable senators opposite should remember that the political parties they support have been responsible for the government of this country since 1949 and it is since that date that the price structure has risen to its present level.
– How would you have dealt with it?
– It is not my job to say. I did not ask the honorable senator how it should be done. I well remember people of the same political faith as Senator Lillico acting in another parliament of this nation to remove the pegs from land prices. The words of one man, Sir Frank Clarke, with whom I was friendly, even now ring in my ears. He said: “ Oh, Pat, don’t worry. They will right themselves.” More than once in this chamber I have asked honorable senators opposite who are primary producers how much would be required to put their sons on the land, giving them a reasonable chance of success. An amount of £10,000, £15,000 or £20,000 would be required to start with. I admit that it is not of much use now to blame any one. I do not get much pleasure from referring to the position because, like Senator Lillico, I am floundering to find a solution. We stressed the danger of taking away all controls. We were told that the people wanted the controls lifted. The people had just gone through a period such as I hope we will never see again. They were sick of the controls that were applied during the war. Honorable senators opposite capitalized politically on that situation and said, “ Give the controls away “. Today, their chickens are coming home to roost.
I remember quite well when the unions, I think in 1952, stated through the Australian Council of Trade Unions that if the Government would institute some price control so that the workers would know what the money they received in wages would buy, they would not apply for increased wages. I speak with great authority on the subject, because I got the late Mr. Broadby, who was then secretary of the A.C.T.U., and Mr. Monk, who is still alive, to put the undertaking on paper and sign it. The Labour party went out in an election campaign and stated that proposition. But honorable senators opposite were averse to controls, which interfered with the making of huge profits by their friends. When all is said and done, every one will admit that not many industries were not getting a reasonable profit under prices control. But the one thought of the Government parties was to win the election, irrespective of the effect upon Australia of the measures they promised. Now it is their job to find a remedy.
We say that there should be a planned economy. I have asked before whether the Government is frightened of a five-year plan because China, Russia, or some other country has one. We cannot get along in the world of to-day unless we have a plan to follow. Honorable senators opposite complain about the price of wool. We say, “ Why do you not have a marketing board for wool, as for other commodities? “ It could be run by the producers. There is a guaranteed price for wheat which covers the cost of production. All that the nation has to worry about in relation to wheat is whether we shall be able to sell it. The wheat-farmers are not growling about the wheat stabilization scheme. We say that something should be done for the woolgrowers. Let them work the scheme themselves, and let them have auctions. But at least fix a minimum price for the wool that leaves this country. No, you do not do that. The Government is just as well informed as is the Opposition of what goes on under the auction system. The Government has read what Mr. Justice Cook said about pies. But still it does nothing. The Government has the job ahead of it; in fact, we all have the job ahead of us. It is no good bemoaning the position in which we now find ourselves. The Government should be ashamed of itself for bringing Australia to its present position.
Senator Lillico spoke about the problem of feeding the large numbers of people born in the world each year. What is our trouble to-day? Over the years the people of China and the rubber workers of Malaya, to mention just a few, have been denied a decent standard of living. During the war promises were made that with the cessation of hostilities their lot would improve. History shows that many promises have been made to uplift the people of many lands. Is it of any use for Senator Lillico to talk about all the extra mouths to feed? Is he, as a primary producer, prepared to feed these people without regard for payment? Who is to pay for their food? It is no good simply prattling on about this problem. We know that there are millions of people to the north of Australia. I cannot envisage any of my farmer friends opposite sending their produce into those northern regions unless they are paid for it. That is as it should be. The Government should take stock of the present situation, although even that course will not cure it. History will show that the Government was advised against taking the course that it has adopted. If forecasts concerning the impli cations of the Common Market prove correct, as the years unfold to 1970 we will find ourselves in trouble.
But for sales last year to China and similar sales this year, if we are lucky enough to make them, the wheat industry would not be in its present happy position. Do not let Senator Lillico accuse me of supporting the ideology of China simply because I make that comment. Our ability to compete in the world’s markets depends on our cost structure at home. Our internal cost structure, whether we are engaged in producing wool or other primary produce or whether we are engaged in secondary industry, could involve us in considerable difficulties.
My main purpose in making those remarks was to reply to Senator Lillico’s remarks. The subject before the Senate is the report of the Tariff Board. That report is the usual wide-ranging and critical study of the economy of this country and the work of the board itself. I propose to make a few brief comments about the role of the Tariff Board. I shall then confine my remarks to some particular matters dealt with in the Board’s report.
The Tariff Board’s principal function is, of course, to protect Australian industries. Protection has been a live issue in Australia since about 1910. A famous election was won in 1910 by the Fisher Labour Government on the issue of protection. When we speak of protection we do not speak solely of secondary industries. We speak also of the rural industries. One such industry that springs to mind is the sugar industry. But, in the main, protection is afforded to manufacturing industries. I have always been somewhat concerned by our method of affording protection. It seemed to me that, in the main, we are protecting the manufacturer. We protect him from his competitors overseas, some of whom are in countries with low labour costs and some of whom are in countries, such as the United States of America, where wages are high. The United States of America has a population of about 180,000,000 persons and the huge local demand for goods enables industries to operate on a sound footing. I have very seldom heard of industries protected in Australia being concerned about the price structure. As a rule, the goods that such industries produce cost very little less than a comparable imported article, whether it be imported under British preferential tariff or otherwise.
We must have local industries. They provide employment for our people. If we are to build this country in the way that we desire we must do it by the establishment of secondary industries in our towns. Professor Wadham, who is Professor of Agriculture at the University of Melbourne, some years ago produced statistics to show the astounding number of people who have left the primary industries because of mechanization. Yet we all know the great productive strides that the primary industries have made.
– Why not shorten their hours?
– If Senator Wright, as an employer in primary industry, wants to shorten the hours of his employees, I will not argue with him about that. I will leave it to his good graces, and no doubt he will do what he thinks is right in the matter.
– You know that the vested interests of the unions have the employers in a fix.
– Why be onesided about this? AH that the average worker has to sell is his labour. Is there anything wrong with wanting to sell it in the best market?
– I am pleased to be able to agree at any time with my friend Senator Wright. I say that it is the responsibility of the Tariff Board, on the one hand, to protect industry by protective tariffs and, on the other hand, to recommend bounties where it believes they should be recommended. In the main, tariffs tend to raise the price of imported goods, and so increase the cost structure of primary producers - a very important section of the community indeed. As a body, the primary producers have always resisted the imposition of tariffs. They would rather have bounties. A bounty, as a rule, comes out of the Consolidated Revenue Fund, whilst a tariff is normally paid by the purchaser of a par ticular article. One could have a very good debate on the question whether we should have what is known as new protection. Some years ago some people formed a league for new protection, but as that is not relevant to this report, I shall pass on.
I wish now to deal with specific portions of the report. The report states that the board completed inquiries into 63 matters referred to it, ranging over a number of items from automatic electrical equipment to woollen piece goods. I do not want to take up the time of the Senate by going through the actual items into which the board inquired. The board states that it made reports on 61 of the items in respect of which it conducted inquiries, plus 25 reports under section 17a of the Tariff Board Act. I understand that these are matters specifically referred to the board by the Minister. I often ask myself whether hearings under this section of the act have the inside running. I think that Senator Wright, by way of interjection to Senator McKenna, referred to them as preference items. The board dealt also with six interim reports under the general textile reference.
The report goes on to state that the board reduced the average time between the date of reference and the date of its report from fifteen months in 1959-60 to ten and threequarter months last year. Whilst, along with several other honorable senators, I compliment the board on its expedition, I note also that the inquiries pending at the moment number 21.
– Did you say you complimented the board on its expedition when there is a lag of ten and three-quarter months?
– I am in no position to judge whether that is the shortest possible time in which it could complete its inquiries. The board has reduced the time lag from fifteen months in 1959-60 to ten and three-quarter months in 1961-62, and I am hoping that when we discuss the next report we will find that the time lag has been reduced still further. The report discloses that the back lag at the present time is 21 items.
The board made some very interesting observations on the economic background in Australia. In paragraph 15 of the report it pointed out that in November, 1960, at the peak of employment, 3,088,500 people were employed. By September, 1961, the number had fallen to 3,004,000 - a drop of 84,500. I am concerned about the fewer number of people employed. From November, 1960, to September, 1961, the population of Australia increased, in round figures, by 200,000. In that period, the work force would have increased, in round figures, by from 60,000 to 70,000 due to the number of school leavers and the migrants entering this country. Looked at in this light, one can say that in the ten months from November, I960, to September, 1961, the use of the available work force in this country contracted by roughly 140,000 to 150,000 people. That is a tragic waste of the available resources of this nation. The board states that it was not until June of this year that the number of persons employed reached the peak figure of November, 1960. That is twenty months later. I ask myself: What has happened to those 140,000 to 150,000 people, remembering the number of people who are unemployed at this stage?
Both Senator McKenna and Senator Lillico referred to paragraph 17 of the board’s report. It reads -
Employment in manufacturing has not yet recovered to its former levels. At 30th June, 1962, employment in manufacturing stood at 1,181,000. This was more than 20,000 below the number in November, 1960.
Let us consider the number of people who have come to this country since November, 1960, plus the children who left school in 1961 and 1962.
– That paragraph deals only with manufacturing industries.
– Yes, but one wonders what has happened to those people. Certainly they are not employed in the rural industries.
– That figure would not include the building industry, would it?
– I do not know whether it would or not. I take Senator Wright’s word for that and thank him for the advice. Irrespective of that, a great number of people who were employed in November, 1960, at the peak, must be out of industry never to come back to it. One wonders whether we will ever be able to attain the peak of employment that we all desire. I can speak for only one political party, but I want to be fair. Both parties believe or say that they believe in full employment of the Australian people.
In paragraph 22 of the report the board directs attention to the great drain on Australia’s balance of payments. It points out that the cost of freight and insurance for the year was estimated at £229,000,000. I have heard the answers given by Ministers to questions asked by honorable senators on this side of the chamber about Australia having its own overseas shipping line. I admit without hesitation that such a line would have to be subsidized. Does any one on the Government side who does not believe in Australia having its own overseas shipping line consider that such a line would have to be subsidized to the extent of the amount that freight costs this country? If we had to subsidize the line we would be paying the subsidy with our own money; but we have to pay the freight and insurance, which are called invisibles, to people overseas from our exports.
Sooner or later we will have to look at the facts and decide whether it is better for Australia to continue to pay invisibles on its exports to the extent of £229,000,000 a year than to subsidize its own line and insure its own goods. I cannot say what the line would cost, but I believe that any one who said that Australia’s balanceofpayments position would not show a profit if we ran our own line would be very rash.
– You would turn a loss into a profit by paying a subsidy, would you?
– No. I am saying that at present the invisibles charged on our exports cost us £229,000,000 a year. We have to pay that amount from export earnings. This matter of Australia having its own overseas shipping line has been argued often in this chamber. Honorable senators on this side of the chamber who have raised the matter have been told that they would get a shock if they knew how much the line would cost. Well, let us get a shock and let us know whether, from the nation’s point of view, it is better to spend £229,000,000 a year on invisibles or to subsidize our own line. Let us have a look at the matter. That is all that I am asking for. I would be more than surprised if the subsidy cost anywhere near that amount.
– But you seem to imply that if we paid the subsidy we would be relieved of paying the invisibles.
– No, I am saying that we would not have to send goods overseas to pay the invisibles if we had our own line and subsidized it. The report says that sending all our goods overseas in ships owned outside Australia costs £229,000,000 a year, including insurance. All I am saying is that we should have a look at the matter or have an inquiry into whether it would be better for Australia to subsidize its own line and insure its own exports. That is all I am concerned about. I have said that I do not think the subsidy would cost £229,000,000 a year. If it would, I would be a very bad judge.
The report then deals with the terms of trade. In paragraph 27, the board refers to the adverse terms of trade that Australia has faced since 1953. Senator McKenna dealt with this matter. I do not want to take up the time of the Senate unnecessarily; but I am amazed to find that taking the export price index in the base year 1953 at 100, the provisional figure for 1962 is down to 72; taking the import price index in the base year 1953 at 100, the provisional figure for 1962 is up to 109; and taking the terms of trade in 1953 at 100, the figure in 1954 was 101 and the provisional figure for 1962 is down to 66. The only good thing that can be said about it is that the provisional figure for 1962 is two points higher than that for 1961.
The board also stated in its report that the strong import competition in a contracted market contributed to the large number of requests for protection against imports. It noted that several industries had commenced production behind the shelter of import licensing and, having expanded into unprofitable areas of production, were unable to compete with imports even with the assistance of a reasonable level of protection. All I can say is that if, after a given time, an industry was found to be uneconomic, I could not find fault with the board if it refused to bump up the protection enjoyed by that industry.
I think the board adopted a reasonable attitude in cases of that kind. In paragraph 50 of its report, the board points to the fact that increased competition from imports had compelled importers more diligently to seek the most competitive sources of supply. In paragraph 51, it states that in some instances manufacturers’ distribution costs had been increased by large retailers placing smaller orders at more frequent intervals in order to reduce stockholding costs and increase liquidity.
I found paragraph 54 of the report very interesting. It reads -
The Board found excess capacity in a number of industries which it reviewed during the year.
It also said that in some cases the effect on costs was considerable and went on to point out that excess capacity could arise from one of several causes. One cause mentioned was the installation of plant surplus to current requirements to meet expected demand, or in anticipation of gaining an increased share of the market. Another was the fact that sometimes the technical limitations of a plant require it to be a minimum size that has a capacity which is in excess of the requirements of the Australian market. A further cause mentioned was technical innovations making existing plant or products obsolescent. A fourth reason given was the usual one of reduced demand, and a fifth was lack of proper appraisal of the market. In view of those findings by the board, I believe the Government could well consider carrying out an investigation into the amount of unused capacity and the establishment of an advisory service to manufacturers. I believe that is a function which the Government could well ask either the Tariff Board or some other competent authority to discharge.
This Government expects to attract a large number of new citizens to Australia. Its target is, I think, 125,000 migrants a year. I should like to know the net figure achieved each year after making allowance for the number who go back to their home countries and the number of Australians who, having been away for more than two years, return to this country. However, if we are to help build this country and to provide employment for all of its people, this Government has a duty to pay more than lip service to the board’s findings.
In paragraph 58 of its report, the board says -
Evidence received during the year indicated that producers in some industries had continued to engage in practices directed towards the restriction of competition.
Some of the practices mentioned were manufacturers requiring merchants to discontinue the handling of imported goods, the adoption of uniform price lists and the fixing of discount margins bearing little relationship to the costs of distribution and selling. In paragraph 59 of its report, the board points out that it noted a number of cases during the year in which retailers appeared to be taking extravagant margins. I should like to know from the Minister when we shall have the opportunity of examining the bill to deal with restrictive trade practices about which the Government has had so much to say for a number of years now. Is the Government really in earnest about introducing such a measure? It has had a number of years in which to take some action and, when the Tariff Board points out that these practices do exist, the Minister owes it to the Senate at least to ascertain when the AttorneyGeneral (Sir Garfield Barwick) intends to give the Parliament of the people the opportunity of examining his proposals. As Senator McKenna has said, if, before such a bill can be introduced, it will be necessary to alter the Constitution, the Government will find the Opposition very willing to cooperate in having the relevant part of the Constitution appropriately altered.
In paragraph 60 of its report, the board refers to what are known as “ close out “ sales - sales made at prices reduced below the usual levels both for the home and export markets to enable the clearing of goods at the end of a run of production. No one could argue that such sales do not adversely affect Australian manufacturers. The board says that such imports should be controlled by means other than the imposition of a protective duty and that Canada had found an effective solution to the problem. I join with the Leader of the Opposition (Senator McKenna) in asking the Minister what the Government proposes to do about that recommendation of the board, if I may so call it. At least the board has brought to the Government’s notice the fact that these undesirable practices occur and that they are damaging to the Australian manufacturer. It has stated that it does not believe that they can be controlled by a protective duty and, as I have stated, also mentions that Canada has found a way of dealing with the problem. Let us hope that when he replies the Minister will be able to tell us what he proposes to do.
A very interesting passage is to be found at page 15 of the board’s report. Referring to refined petroleum products the board draws attention to the uneconomic pattern of production of many local refineries when considered alongside the Australian pattern of demand. It points out that 40 per cent, of the industry’s total output consisted of light oils such as gasoline and kerosene whereas consumption of such products represented 49 per cent, of Australia’s total consumption. Heavy oils, such as diesel and other fuel oils, represented 60 per cent, of the total production and 51 per cent, of the consumption. The board states that not only did this reduce the profitability of refining, but it created a large surplus supply of heavy oil. Every one knows what that means to the coal industry of this country. It means that this surplus heavy oil is dumped at prices with which the coal industry cannot compete. It must be remembered that the oil companies will produce oil and sell it at those prices only so long as they are compelled to do so. The moment they can find a market elsewhere they will not worry about the industries that have changed over from coal to heavy oil. If there is, perhaps, one industry more than any other which believes in having its pound of flesh, it is the oil industry.
The board states, in paragraph 113 of its report, that the cost of freight on crude oil was about 15 per cent, below the cost at the time that its inquiry was held. Has the Government any idea why the oil people have kept all that money to themselves and why the people of Australia have not received any benefit from that fall of 15 per cent, in the cost of freight on crude oil?
– Do you know the variations of price in the period?
– No. Unfortunately, the board does not give them. If it does, I have not them before me. All
I know is that the price of petrol has not gone down. In fact, if the rumblings of the press in my city can be taken as an indication, the price is likely to go up. The board states that the cost of freight on crude oil had fallen by 15 per cent., and I should say that the price of the petrol which is refined from crude oil should be considered.
– I do not know the figures, but in order to follow your argument I would like to know how the freight is distributed over the retailed product.
– I think you had better ask somebody else. I am merely relying on what the report states.
– I fancy that the resellers in our State took up the loss by reduction of their profits - not that I have a brief for the oil companies-.
– The honorable senator says that the re-sellers in his State took the reduction into their own profits, and that is what I am complaining about. The ordinary people did not receive any of it.
The last matter with which the report deals is the staffing position. If this board is to function efficiently, as it does and as we hope it will continue to do, it must have adequate staff. If it has sufficient staff it may even be able to reduce the time taken in conducting inquiries. I take it that the staff of the board is a part of the Department of Trade. I have no reason to doubt that the staff position is as the report states it to be. The Tariff Board is a responsible body and it should be able to obtain sufficient staff so that it may submit its reports to the satisfaction of those who are required to pass them on to this Parliament.
– I rise to support the motion for the printing of the paper. Ever since I have been a member of the Parliament I have admired the way in which the Tariff Board has presented its annual reports. The report that we are considering is no exception to the excellent standard set in previous years. As I see it, it is a clear, historical survey of the main features of the economy during the year 1960-61, with a short statement of the applications dealt with by the board and some excellent statistical information in the appendices. I believe that the report is deserving of the earnest study of the Senate.
First, I think I should recapitulate some of the main features of the work of the Tariff Board. The board consists of eight members. From what I know of them, they are people of judicial temperament. They are presided over by an experienced economist in Sir Leslie Melville. Some of the members are civil servants and others have come from primary and secondary industry. The output of the board is quite considerable. It now meets in Canberra, in fine new premises. As Senator Kennelly stated at the conclusion of his address, the staff problem is one that seems to be bedevilling the activities of the board. The report states, in paragraph 252-
At 30th June, 1962, the total actual strength of the work force in the project section was approximately two-thirds of the establishment. It was necessary for a number of officers to work long hours of overtime during the year.
I agree with the statement in the report that adequate staff is essential. The fact that the board now has fine new premises should act as a challenge to the Government to see that adequate staff is provided.
In this city we have the Australian National University, and in the School of General Studies there is great strength in the departments of study which could provide young men and women suitable for the particular work of compiling statistics, recording and undertaking the project work associated with the board’s functions. I should like the Government to assure me that it is doing all it can to recruit the best of the young people available in this city. Is the Government seeking such employees from the Australian National University? Has it in mind the provision of scholarships and other inducements so that the Australian National University may be able to provide this important and basic source of recruitment for the work of the board?
There is an interesting observation in paragraph 253 to the effect that at present the staff of the board is a part of the staff of the Department of Trade. The report suggests that it is somewhat cumbersome in practice for vacancies to be filled from the usual departmental sources. It also suggests ” Tariff Board. [SENATE.] that there might be advantages in having the staff of the Tariff Board as a separate establishment. I submit that that is a matter to which the Government should give immediate attention. I understand from an interjection made by Senator Wright during the debate that there is a considerable lag in the time taken by the board to deal with requests from industries. I believe that the average time taken in 1956-57 was something like fourteen and one-half months for each inquiry and that the time taken at present is approximately ten and threequarter months. That is some improvement certainly but it seems wrong that an industry should have to wait at least ten and three-quarter months for the ultimate consideration of its application by the Tariff Board. Then, of course, there is a further time lag for the Government and the Parliament to consider whether action should be taken in the light of the board’s report. The effect is that well over a year elapses before an initial inquiry is completed. These are matters of great importance.
I am grateful to Senator Wright for a useful interjection that he made when he referred to paragraph 52 of the Tariff Board’s report, which states -
In its examination of requests for assistance the Board requires considerable and detailed evidence of a confidential nature. Most witnesses who appear before the Board during the year complied, as promptly and fully as practicable, with the Board’s requests for this information. Failure on the part of a witness to supply information fully or within a reasonable time necessarily hampers the Board in its consideration of cases and leads to delays in reporting. The Board finds it difficult to understand the attitude of several applicants for protection, who appeared before it during the year, to whom it was necessary to send repeated requests for data which the witnesses had undertaken to submit to the Board.
If I remember rightly, Senator Wright asked by way of interjection why there was no provision to penalize a witness who failed to answer promptly requests for further information. I suggest to the Minister for Customs and Excise (Senator Henty) that some thought might be given to the Tariff Board’s rules of procedure to ensure that applicants who fail to meet their obligations to supply necessary information within a reasonable time shall be penalized by having their cases proceeded with no further by the Tariff Board. It is regrettable that already long delays should be lengthened by the failure to supply information within a reasonable time.
In my reading of chapter 2 of the Trim Board’s report under the heading of “The Economic Background”, I was impressed by the succinct remarks contained in paragraphs 9 to 18. They were of such interest to me that I was able to link up a number of figures contained in the board’s report with the Treasury Information Bulletin No. 28 of October, 1962, which has just come to our hands. It is interesting to note the rise in industrial production referred to in the report in the period to 30th June. The rate of production has accelerated considerably since that date. Paragraphs 9 and 10 of the Tariff Board’s report referred to production in rural industries.
In paragraph 11, the board refers to sections of manufacturing industry and in particular to the production of steel, basic materials and power. Production of these commodities in the recent September quarter changed by comparison with the September quarter of 1961 as follows: Pig iron dropped by 3.1 per cent. Production of ingot steel increased by 1 per cent.; tin plate by 38 per cent.; electricity by 7.5 per cent, and gas by 9.4 per cent. Production of sulphuric acid dropped by 8 per cent. Under the heading of building materials, the production of bricks rose by 7.7 per cent. Of the consumer durables, production of refrigerators increased by 56 per cent, and radios and radiograms by 31 per cent, but the output of television sets dropped by 16 per cent. One remarkable item covered petrol lawnmowers. Production of these increased by 403 per cent, in the period.
At page 30 of the Tariff Board’s report, there is an interesting survey of the prices of iron and steel in Australia and overseas. At 31st March, 1962, comparative prices in round figures were -
£5 14s. 4d. respectively. So it is apparent that in prices to industry of these basic items Australia leads all other parts of the Western world except in the case of hot dipped tin plate. In that case, the Australian price was slightly higher than the United Kingdom price, but it was lower than prices in the United States of America and Japan. These matters in the report of the Tariff Board are a source of great satisfaction to us and show what a wellorganized industry run completely by private enterprise in a free economy is able to do in comparison with similar industries in other parts of the world.
In connexion with external trade, the report highlights some of the activities of the Government in increasing the output of our export industries. In paragraph 24, the board refers to manufactured products and states -
Manufactured products made a valuable and increased contribution to export earnings in 1961-62, the most notable achievement being an increase of £15,000,000 in exports of iron and steel. The need for stimulating and diversifying exports, which has been emphasized by the Board in previous reports, remains important.
We all agree with that. The report continues -
Evidence received by the Board at inquiries during the year shows that the Government’s export incentive scheme has assisted towards this end.
In that connexion I was interested to read in the official journal of the New South Wales Chamber of Manufactures for the month of October, 1962, an illustration of the tax rebate applicable in respect of fares incurred by an Australian businessman seeking new export markets. It works on the basis of normal company taxation. For every £1 spent on export promotion, an exporter or potential exporter is allowed a double deduction, that is, £2, from assessable income for income tax purposes. Thus, if a public company paying tax at the rate of 8s. in the £1 were to spend £1 on overseas market promotion, it would save 16s. in tax, so the net cost of the promotion would be 4s. An illustration is given in relation to a person who makes a round trip from Sydney to San Francisco, seven South American countries, New York, and back to Sydney, incurring fares amounting to £1,227. Taking into account the tax rebate, the company will pay only £245.
That gives some idea of the drive for export markets, which has been made attractive to business people. In addition, of course, there is a deduction in respect of pay-roll tax in relation to the promotion of exports, particularly of manufactured items.
I want to say a word about the primary producer to whose lot Senator Lillico made pretty considerable reference. Paragraphs 34 to 37 of the Tariff Board report are important in this regard. Paragraph 34 reads -
At several inquiries conducted by the Board during the year, representatives of primary producers’ organizations stressed the difficulties encountered by the farm sector in periods when price movements for their products were unfavorable in relation to costs of plant, equipment and necessary services.
The board goes on to say, in paragraph 36-
The Board is aware of the particular difficulties facing those sections of primary industry which must compete in world markets and takes them into account in the course of its examination of requests for tariff protection on goods which have an important cost incidence for primary industries.
So the board deliberately takes into account the particular difficulties facing those primary industries. It is important to realize that this is not just a board for the manufacturers or a board to promote the imposition of a tariff. It is a quasi-judicial authority, which inquires into all aspects and takes particular account of difficulties facing those sections of primary industry which compete in world markets. That is why some of us stress the importance of applications for tariff protection being dealt with fully by the board. That is why we are very keen that there be no time lag. That is why we are very keen that the special authority be only in the nature of a fire brigade which puts out a fire, and that its work be quickly checked by the full Tariff Board. If the relief given by the authority is to be effective, it should be quickly checked by the full Tariff Board. That is why expedition is so important; the protection afforded by the special authority is in the nature only of a temporary move. We should therefore countenance no unnecessary delay in the work of this important board.
I was very interested to hear, in the statement read by the Leader of the Government in the Senate (Senator Spooner), on 17th October last, a good deal of reference to Australia’s tariff policy. Honorable senators will recall that Senator Spooner read a statement which the Prime Minister (Mr. Menzies) was making in another place. The idea was that there be a large public inquiry, presided over by an eminent person, assisted by others of equal eminence and that one of the items of inquiry be -
The effect of customs tariffs and other forms, direct or indirect, or protection on the disposition of resources and on the broad economic objectives . . .
The Leader stated -
The Government wishes to make it clear that it has the firmest intention of preserving the full independence of the Tariff Board as an advisory body established by Parliament, its system of open and public inquiry and its high public standing and prestige.
I want to conclude by acknowledging, as I have acknowledged in the past, the full independence of the Tariff Board, as revealed by its report which is before the Senate. The board has in no way shown itself to be subservient to the Government. It has gone into matters with most commendable independence. Its statements are forthright. Where the board feels it is proper to do so, it complements government policy, but equally it criticizes government policy where it feels that this is proper. I hope that when the new body of inquiry is brought into being its work will be complementary and of great assistance to the work of the Tariff Board. I hope that the Government, as a result of the suggestions for improvement in procedure that I and other honorable senators have made, will further enhance the usefulness of the Tariff Board to the nation.
– One of the best debates of each session is on the annual report of the Tariff Board, which contains much very interesting factual detail. The debate gives us an opportunity to examine closely the board’s work and decisions which are of such paramount importance to both secondary and primary industry throughout Australia. I do not propose to deal with all of the matters that were raised by the Leader of the Opposition (Senator McKenna) because they will probably be dealt with by the Minister in charge of the debate, Senator Spooner. But I would like to refer to one or two matters that have been mentioned in the Senate and published in the press. I refer to the principles of tariff making. In its annual report for 1958-59 the Tariff Board sets out clearly a long list of the principles of tariff making. It has been suggested that the Government should lay down a charter under which the Tariff Board should operate. This subject of a charter has been referred to by a number of honorable senators during this debate and also by the press. We must be very careful about any suggestion that we should give directions to an independent authority. After all, a charter is often misconstrued as directions. In its 1958-59 report the board, dealing with the principles of tariff making, said -
In its Annual Report for 1933, the Tariff Board set out certain general principles under which it had operated. . . .
The report then briefly refers to the provisions pf the United Kingdom-Australia Trade Agreement, which it says substantially re-affirms those principles. The report continues -
It is sometimes suggested that the Board should elaborate on these principles by listing in full the conditions that must be present before an industry will be classed as “ economic and efficient “.
That is a problem that has been referred to by many speakers: What is meant by an economic and efficient undertaking? The report continues -
It is doubtful, however, whether such an’ approach would be practicable even if there were clearer indications of government policy in many fields. The actual criteria vary in importance and usefulness in each case. The conditions that are relevant in one instance may be largely inappropriate in another. The Board has found that the only reasonable approach is to make on each occasion a separate judgment based on all the relevant criteria. However, it is essential that the various interests giving evidence before the Board should attempt to demonstrate, by factual argument, whether or not the industry concerned is “ economic and efficient “.
In examining what constitutes economic operation, the Board considers broad questions such as the effects of protection on prices to consumers either directly, or indirectly through costs to user industries, whether the industry provides an outlet for economical exploitation of local resources, whether establishment of the industry concerned will assist in the development of other industries, the prospects for further growth of the local industry, the possibility of competing in export markets and so on. In addition, the Board considers particular aspects such as the extent of demand for the industry’s product, the proportion of the market that Australian manufacturers can supply and the acceptability of the local product to consumers - in quality, range, variety and availability.
No list of factors relating to the question of whether or not an industry should be regarded as economic could be exhaustive, but enough has been said to indicate that the Board expects an industry seeking protection to demonstrate that it is worthwhile and to indicate why it considers that the gains to the Australian economy from protecting the industry will offset the costs. Such arguments should be an important part of the case presented by industries requesting tariff assistance. Frequently, however, only limited evidence of a general character is given on these aspects and industries thereby fail to do justice to their claim that the industry and its production are economic. Similarly, witnesses opposed to protection sometimes do not make their opposition as effective as they could were they to direct their attention to the question of whether or not production is economic. The Board does not, as a result, receive as much assistance as it might in making its judgment on this question.
The evidence required to establish the efficiency of a local industry is of equal importance. Often a good deal of evidence is presented which is intended to show only the technical efficiency of an industry’s manufacturing processes. It is not enough, however, merely to seek to establish technical efficiency in manufacture. Efficiency, as the Board interprets the word, involves not only efficiency in the productive processes relating to the use of materials and labour, machinery and plant, but also efficiency in such things as management, selling, &c. It involves not only a study of efficiency in the context of existing conditions but also under the circumstances that would exist in the future were the industry to be accorded protection. The Board considers that any approach to the measurement of efficiency must be realistic, lt does not attempt to impose an absolute measure. Rather, where it is appropriate, the Board looks at levels of efficiency as established by each member of the local industry relative to other members, relative to overseas producers and relative te other industries in Australia.
It is there that I, and, I think, the board also, differ from the Leader of the Opposition, who suggests that some charter should be given which would, as the board puts it, impose an absolute measure. I suggest that in the working of the board there is no such thing as an absolute measure by which the criterion of efficiency may be judged.
The United Kingdom-Australia Trade Agreement of 1957 refers specifically to two very important factors over and above what is referred to by the board. First, there is the importance of industries from the point of view of defence, and, secondly, there is the importance of developing infant industries which in time may become worth-while industries for Australia.
Another factor which I suggest must be taken into account is the location of established industries. Decentralized industries present a problem in Australia. Our transport costs are so high compared with transport costs in other countries that the distribution of industry becomes a difficult proposition. So, when industries established in country areas seek protection I think the board has a duty to consider what would be the effect of not granting them protection, having regard to the availability of alternative employment in the particular areas in which they are established. To state the position in down-to-earth terms, if you have in a country area an industry that is meeting competition and employing 200 or 300 persons, it is not easy to find alternative employment for those people in a decentralized small country area. But in the cities, where you have a number of factories, it is not difficult to find alternative employment for 200 or 300 persons. Those are additional criteria that must be taken into account by the Tariff Board when judging the value of an industry to Australia and the Australian people and the amount of protection that should be afforded to it. I submit, therefore, that it is a little superficial to suggest that any government could lay down a black and white set of rules under which the Tariff Board should work. The board itself, by long practice and experience, has evolved a system which by and large is working satisfactorily for Australian industry.
Mention has been made of the delay of ten and three-quarter months in the hearing of an application by the board. There has been a reduction in the time lag. The delay is caused by a number of reasons which have been mentioned by honorable senators to-night. I do not think the delay is as important to-day as it was previously because of the special machinery which the Government has introduced to enable industries to be held, as it were, pending the Tariff Board’s inquiry. I agree that we should endeavour at all times to keep the time lag as short as possible, but I am emphasizing that the delay has been reduced, and an industry has an opportunity for an emergency hearing by the Special Advisory Authority. When an industry is in danger, as a result of the sudden inflow of imports, it has the opportunity within four weeks to obtain a holding decision from the special authority. That maintains the status quo of that industry until such time as the Tariff Board can complete its hearing. 1 think misunderstanding still exists in many quarters about the differing functions of the special authority and the Tariff Board itself. Every now and again one reads a complaint that the board is being undermined, by some process or other, by the creation of this special authority. I have never been able to understand this criticism. The bases of the two inquiries are so different. The special authority has the task of merely examining the position without determining whether an industry is economic or efficient. He deals with an Australian industry that is employing Australian people. The industry comes to him suddenly and says that it is being seriously threatened by a flood of imports. He inquires into the nature of the imports and the cost structure of the industry at the time. He is not concerned whether the industry is efficient or competitive. That is not his job. All he is interested in is the cost structure of the industry in comparison with that of the imports. He can recommend the imposition of an emergency duty to hold the position until the Tariff Board can examine the whole position of the industry.
It may well turn out that, after an examination by the Tariff Board, the finding of the special authority is confirmed, or it may be found that the industry is inefficient and uneconomical and not worth continuing. The special authority has imposed merely an emergency duty to hold the fort until such time as the Tariff Board can deal with the matter. I do not think this fact was realized by the Labour Party when it voted against the legislation relating to the special authority. I do not think the Labour Party realized the significance of the legislation. It has been a great help to Australian industry to have this emergency protection.
Many industries were required to face up to the fact - I reminded Senator McKenna of it - that the Government indicated to them time after time that import restrictions would never be used by it as a protective measure. That was made clear from the day that import restrictions were introduced. The warning was repeated time after time by the Government which said that import restrictions would never be used as ; protective measure. They were introduced to protect our balance of payments. Immediately our balance of payments was such that the necessity for import restrictions no longer existed, those restrictions were removed. The warning was given over and over again.
Industries themselves had only to keep a watch on the balance-of-payments position of Australia to be thoroughly aware that the time was running out when this secondary protection on which some industries had built themselves into the Australian economy, was going to disappear. They were using import restrictions as a secondary protection, not thinking of the day when these restrictions would disappear and they would be open to competition and to the normal processes of the Tariff Board which this Government - and I venture to say every government that has been in office - has supported. All governments have relied upon the advice of the Tariff Board after public examination. I think it is particularly useful to remind ourselves of this fact.
I disagree with Senator McKenna who stated that import restrictions should be used as a method of protection. Quantitative restrictions, if recommended by the Tariff Board, can be useful in rare cases as a system of protection, but a wholesale system of import restrictions produces in the economy inefficiency in the extreme. For myself I would not support the use of wholesale licensing or import restrictions for the protection of Australian industries unless we had also a balanceofpayments problem. I believe that it is the only occasion when import licensing should be used.
Another matter which interested me - I have always had a very keen interest in this - was the reference to the excess capacity of industry. I think that Australian industry is only beginning to understand that in many countries excess capacity has been used to develop export trade. Many Australian industries which have had excess capacity have sat down and waited for internal demand to take up that excess capacity, although a large number of concessions have been offered to industries by way of taxation concessions, including payroll tax concessions, to enter the export field. More industries are now realizing the advantage to be gained therefrom and are taking up their excess capacity by seeking markets overseas. Sometimes to their astonishment they find that they can compete in new markets where they thought previously no Australian industry could intrude. In this connexion I welcome Senator Laught’s contribution on the costs of Australian industry.
It is being a bit glib, if I may say so, to say that our cost structure is such that we cannot do this and that.
– Senator Wright said that.
– I would not mind who said it. I would still say that my own view is that it is just a bit too glib to say such a thing. Senator Laught quoted from page 30 of the report of the Tariff Board the price of iron and steel in Australia in comparison with the price in other countries. It is most significant. Take the price of pig iron that forms the basis of so much of our manufacturing industry. In Australia it is £21 a ton whereas in Japan it is £33 a ton. That is 50 per cent, more than the price at which the Australian industry can produce it, working under Australian conditions and the Australian cost structure. The prices of steel merchant bars are £42 8s. 3d. in Australia and £56 15s. in the United States of America. The price in the United States is £14 or 33$ per cent, higher than the price of Australian steel merchant bars produced in Australia under Australian working conditions. The prices of structural steel are £42 8s. 3d. in Australia and £55 in the United States of America, or about 33$ per cent, higher.
– Doer, not that indicate the very great efficiency of the Broken Hill Proprietary Company Limited too?
– Yes, that is right; but it does not say that our cost structure is such that we cannot compete with overseas countries. There are other relevant factors that Senator Lillico raised in connexion with efficient industry in Australia. Do not forget that these products are the basis of much of our engineering industry which, with these basic material costs, is entering into the overseas trade more and more and will continue to do so efficiently. The motor car industry is one example of the industries that are benefiting by these basic material costs enabling them to operate in overseas markets. We are indebted to Senator Laught for raising that aspect.
Table 3 on page 28 of the report tells an interesting story of average weekly earnings in manufacturing industries. Taking the figure for average weekly earnings in Australia in the base year at 100, the index rose to 119.4 in 1961. That represented an amount of £22 5s. 8d. In a similar period the average weekly earnings in the United Kingdom rose to £19 0s. 7d. in 1960, and the index rose from 100 to 123.5.
– What was the period?
– That was from 1956 to 1960 in the United Kingdom. The figures for Australia are in respect of the years from 1957 to 1961. Those are the only comparable figures that I can give. I did not go quite far enough. We can compare the figures for 1961. The average weekly earnings in Australia in 1961 were £22 5s. 8d. and the figure for the United Kingdom was £19 18s. lid.
– Yes, Australian. The Australian index rose from 100 to 119.4 and the United Kingdom index rose from 100 to 129.5. Those are the relative figures.
I raise these matters because I do not think that we should suffer from an inferiority complex about what Australian industry can do if it takes into consideration its basic material costs and the capacity of Australian workmen. A great advantage that is often overlooked is that Australian industry is moving into this new field with new machinery which gives it a very significant efficiency ratio. It does not have to discard old machinery.
– Are not they the very figures that are causing such disquiet to Great Britain’s export trade?
– What Senator Wright says is somewhat correct. I have riot studied Great Britain’s export trade. I have tried to keep in touch with our own problems. The Australian position is the one in which 1 am interested. In my opinion there is no doubt that costs in the rest of the world are increasing gradually whilst our costs have remained reasonably stable in the last two years. In fact, the Tariff Board points out that the consumer price index for the June quarter of 1962 was .8 per cent, below the level for the same quarter in 1961. Whilst we have stabilized and are reducing our costs slightly, other countries’ costs are rapidly coming up towards our cost levels. This is a natural criterion.
I do not mean to convey to the Senate by any means that this is the pattern of all Australian industry. If we turn to another table in this very interesting report, we find an entirely different picture in respect of costs of materials in the chemical industry. These costs have immense effects upon the costs of our rural industries. That is something that we have to watch closely. Table 13 shows that the price of dense soda ash in Australia is £34 a ton and the price in the United Kingdom is £18 3s. lOd. The Australian price is nearly double the United Kingdom price. The prices of light soda ash are £37 Ss. in Australia, £18 6s. 2d. in the United Kingdom and £18 10s. in the United States of America. The Australian price is more than double the other prices. The prices of solid caustic soda are £65 in Australia, £39 12s. 7d. in the United Kingdom and £48 in the United States of America. Caustic soda is the basis of much of our superphosphate. The prices of sulphuric acid are £12 9s. in Australia, £14 8s. 8d. in the United Kingdom and £11 4s. Id. in the United States of America. We hold our own there.
I have given those figures, which are detrimental to Australia, to try to prove to the Senate that I am not using my previous argument as indicating the general pattern of industry throughout Australia. There is much that has yet to be done in the efficiency of management and the efficiency of machinery. That has come to be realized by all countries that have gone through a period similar to that through which we have gone in the last two years and have emerged into efficient production. Many of our industries are back to the boom times of 1960. We have found that we do not require the labour force that we required in 1960 to achieve that year’s production. In the two-year period there has been an improvement in efficiency in industry by means of new machinery and new methods of management. Industries are now achieving their production with fewer employees than they used in 1960. That makes this country more competitive than it ever was and will continue to make it more competitive in the export trade.
This raises a problem which is and always has been before honorable senators on both sides of the chamber. Both sides of this chamber have the objective of full employment. The figures given by the Tariff Board of the number of people employed in industry show that at present more people are employed in industry in Australia than at any other time in its history.
– But there are more people in Australia.
– Yes, and there are more people employed. The only exception is the manufacturing industries in which the level of employment is just slightly below the level in 1960. Senator McKenna gave the figures. That decrease is being overhauled rapidly. I believe that it will be overhauled within the next two months and that then we will be back in the position in which we were in 1940. I want to deal with other matters. Therefore, I ask for leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Motion (by Senator Henty) proposed -
That the Senate do now adjourn.
.- I desire to place on record my appreciation of the fact that the Minister for the Interior and the Minister for Works (Mr. Freeth) took note of the debate in this chamber on the estimates for his departments and my request for the preparation of a statement on the development of unit costs in the building industry. I should also like to place on record the reference that is made to the new building industry agreement which came into force in
January, 1962, and which increased wages by 23s. a week, or approximately 5 per cent. In doing so I emphasize that the Minister stated that the building industry absorbed that increase without any apparent rise in costs.
The Minister has been good enough to furnish me with a schedule showing the variations in the cost of main building components over the period 1960-62. With the concurrence of honorable senators, I incorporate the schedule in “ Hansard “ -
I merely add the comment that I think it is a matter for gratification that one should receive so promptly from the Minister information sought in a debate in this chamber. I add the further comment that it is quite apparent that the trend towards a reduction of unit costs in 1961 has halted and is now moving up again. Although it has not yet reached the 1960 level, it soon will be back there, and the effort of last year was quite futile if its effect was only to produce a temporary depression to be followed by an upsurge of costs. I leave the matter there for consideration by the Senate in another debate.
Question resolved in the affirmative.
Senate adjourned at 10.22 p.m.
Cite as: Australia, Senate, Debates, 6 November 1962, viewed 22 October 2017, <http://historichansard.net/senate/1962/19621106_senate_24_s22/>.