25 March 1965

25th Parliament · 1st Session

The DEPUTY PRESIDENT (Senator Drake-Brockman) took the chair at 11 a.m., and read1 prayers.

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– Has the Minister for Civil Aviation seen reports that Ansett-A.N.A. proposes to purchase a number of new DC9 aircraft which have approximately the same capacity as the Boeing 727 jet aircraft at present in service? Was it not the intention of the two airlines to arrange to purchase, instead, a smaller jet aircraft to be used to replace the Viscount aircraft? Have the two airlines agreed that the new aircraft to be purchased should be of the approximate size of the Boeing 727 jets? If not, what is the present position?

Senator HENTY:
Minister for Civil Aviation · TASMANIA · LP

– I have read the Press report referred to by the honorable senator and I have also had confirmation of the proposal by letter from Ansett Transport Industries Ltd. Naturally, I will have to discuss the matter with Trans-Australia Airlines to find out what it has in mind before anything can be done. The proposal of Trans-Australia Airlines will come to us in the very near future. When the proposals of both airlines are before us, it will be necessary to examine the state of the airline industry and the facilities available at the airports to cater for the aircraft proposed to be purchased. The choice of the type of aircraft is largely left to the airlines.

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Minister for Customs and Excise · NEW SOUTH WALES · LP

– Yesterday I issued a Press statement on this matter. For the information of honorable senators who may not have yet seen the published item, perhaps I could enlarge upon the action that has been taken. My Department received a complaint from an Australian foot wear manufacturer alleging that some footwear from mainland China is being sold in Australia at unfair prices. The complaint further alleges that this is causing injury to the local industry. I am informed by my Department that preliminary inquiries have indicated that anti-dumping action is warranted. Accordingly, dumping cash securities will be required on the importation of footwear to Australia from mainland China on or after 22nd March last. It will apply to a variety of shoes mainly in the young people’s market, with leather or composition leather outer soles. The dumping cash security is a deposit contributed by importers to provide interim protection to the local industry until the inquiries by my Department are complete. It should be understood that if the inquiries indicate that no dumping exists, the cash security will be returned. However, on the other hand, if dumping is established the matter will be referred to the Tariff Board immediately.

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Senator BENN:

– Can the Minister representing the Minister for Primary Industry inform me why 200 tons of tobacco leaf, worth more than £100,000, were burned at the Nudgee rubbish dump, Brisbane, early in December 1964? Was the tobacco leaf, which would have made some 180 million cigarettes, in excess of manufacturers’ requirements? Is it possible to adjust tariff charges so that tobacco manufacturing companies in Australia will be forced to use all the Australian grown leaf in their products?

Minister for Repatriation · NEW SOUTH WALES · CP

– I do not have the information sought, but I will obtain it from the Minister for Primary Industry and have it sent to the honorable senator.

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Senator BRANSON:

– I direct a question to the Minister representing the Minister for Supply. The Ranger shot to the moon has been rather overshadowed by the recent successful trips into space by astronauts. Is the Minister in a position to give the Senate any information about this successful moon shot?


– I have obtained some information from the Minister for Supply. In passing, let me say that I agree with the honorable senator that so much has been happening in this field in the last few days that it is really quite an effort to keep up with all the events. It may well be within the memory of all of us here that, when we were very young children, our parents said to us: “ Tell that to the man in the moon “, as a sort of answer to the flights of fancy of our childhood. But a man in the moon is a very real probability in the near future.

The Minister has informed me that the Australian deep-space tracking station at Woomera, in South Australia, played an important role in tracking the course of the highly successful United States Ranger 9 spacecraft which landed on the moon early today after taking several thousand close-up pictures of the moon’s surface. According to early reports from American space research officials this morning, the Ranger 9 photographic spacecraft, with six television cameras on board, was another outstanding example of advanced technology in space research, and a further splendid example of the close cooperation in this field between the United States and the Commonwealth of Australia. Australian personnel at the Woomera tracking station maintained radio contact with Ranger 9 for several hours after it was launched from Cape Kennedy on Monday morning. The Woomera station tracked Ranger 9 again for 12 hours on Monday night, again on Tuesday for a long period, and for about 13 hours until 12.30 p.m. on Wednesday, 24th March.

Officers of the Department of Supply and private industry operations contractors at Woomera also successfully tracked Ranger 9 during the final stages of its long flight to the moon late last night and early this morning. Altogether, we can again feel pride in this wonderful scientific achievement and of the part taken by Australian scientists and technicians at our tracking stations, which we manage on behalf of America.

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Senator MURPHY:

– My question is directed to the Minister for Civil Aviation: Can anything be done to end the rationalisation of airline timetables, which operates to the convenience of the airlines and to the inconvenience of passengers by a system of simultaneous departures followed by a long period of no departures? Will the Minister at least do something about the worst examples of this?

Senator HENTY:

– This is one of the first problems I tackled when I became Minister for Civil Aviation. I studied the results of the long examination which my predecessor had made of the problem but, after very close consideration, I have been unable to find a solution. When we take into account - as the airlines have to do - the efficient utilisation of jet aircraft and the ancillary services operating from each airport where trunk line jet aircraft land, we see that the overall pattern of these timetables is one of adhering to the times when most people in Australia wish to travel. Which airline is to be asked to move out of that pattern? Whichever one does so will lose a considerable amount of revenue. Both airlines are conducted on a business basis. They have their aircraft at the airports at the time when the majority of the people wish to travel.

This matter has been proved by fact over and over again. Trans-Australia Airlines at one time moved away from this pattern to test the position. It moved away half an hour from the early start at one airport, but it lost passengers. It moved away an hour and saw the other airline put on two aircraft to carry the extra passengers while it lost further passengers. T.A.A. returned to the time when the majority of the passengers wanted to travel, and regained its passengers. This matter has been tested. I have tried assiduously to have the system altered, but after a close study of the position and after being fully informed by both the airlines and my Department on the matter, I am satisfied that the airlines must provide a service when the majority of the passengers wish to travel. Because the airlines must utilise the £3 million jets at airports from which a great number of ancillary aircraft fly to inland areas, the present pattern must be followed.

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Senator SIM:

– I ask a question of the Minister representing the Treasurer. Will the Treasurer consider making available to the Australian public a collection of the last issues of Australian currency now in use? The Treasurer might consider making the coins available in a wallet with a perspex cover so that the contents are readily visible. Such a collection, I suggest, might prove a valued momento in the years to come.

Senator HENTY:

– The honorable senator has asked an important question. His suggestion follows the pattern which has been adopted in other countries. It is worthy of consideration. I shall certainly submit the question to the Treasurer and have the answer forwarded direct to the honorable senator.

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– I desire to ask the Minister for Civil Aviation a question. It follows the question asked by Senator Murphy and the answer which he received. Was not Trans-Australia Airlines forced, by direction of the Director-General of Civil Aviation, out of the pattern of operating its aircraft at times when passengers desired to travel, in respect of its direct flights from Adelaide to Canberra on Tuesdays and from Canberra to Adelaide on Fridays?

Senator HENTY:

– The programme of aircraft travel is drawn up by the airlines themselves. The capacity of the airlines on trunk routes is limited. The Arbitrator, Mr. Justice Spicer, ruled that there should be a 50-50 availability of traffic lines on the trunk routes. Under that ruling some alterations may have to be made in the pattern. At the present time I am not aware of the position regarding the flights to which the honorable senator has referred. If he will be good enough to put the question on the notice-paper, I shall get the facts for him.

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Minister for Defence · WESTERN AUSTRALIA · LP

– In anticipation of this question being asked by Senator Sir Walter Cooper, I have obtained the following information -

The Minister for National Development announced on 17th November 1964 that the Commonwealth Government wished to see an accelerated search for phosphate deposits in Australia. There was a rising demand for superphosphate in Australia which had been encouraged by the Commonwealth Government subsidy of £3 a ton. The greater usage was being reflected in increased productivity in our primary industries. New records in the volume of rural production are being set, due largely to the expansion in pasture improvement; superphosphate is a vital factor in this development.

The Government felt that there were prospects that an intensified search for phosphates would lead to the discovery of workable deposits. It therefore wished to encourage private enterprise to play an active role in this intensified search. The Government felt that participation by private enterprise would not only add to the size of the exploration effort, but also to the diversity of approach and the variety of techniques used in exploration programmes.

Any search by private enterprise would be supported by the Commonwealth Bureau of Mineral Resources carrying out its traditional role of undertaking basic investigations and regional studies and in providing basic information required by the mining industry. In addition, much valuable support and assistance could be provided by the Mines Departments and Geological Surveys of the various States.

Subsequently on 13th January 1965 the Minister for National Development announced that approval had been given for the Commonwealth Bureau of Mineral Resources to engage two specialists from overseas to further the search for phosphate deposits on the mainland and offshore area of the Australian continent. The two specialists are Dr. Richard Sheldon of the United States Geological Survey and Dr. Van Andel of the Scripps Institution of Oceanography. Dr. Sheldon has had long experience in the search for and assessment of phosphate deposits in the United States and overseas countries including Turkey and Chile. Dr. Van Andel is a leading specialist on marine geology.

In the Minister’s statement of 13th January the point was made that the first step is to make a comprehensive review of basic data and an assessment of possibilities as a firm basis for an expanded and systematic programme covering the whole field. This comprehensive review has been commenced by the Bureau of Mineral Resources and is now in progress.

Dr. Sheldon and Dr. Van Andel are not expected to arrive in Australia until the middle of this year. For the moment Dr. Sheldon is completing a tour as a visiting professor at Harvard University in the United States.

One of the first actions of these U.S. consultants will be to study the basic data now being assembled by the Bureau.

The Bureau of Mineral Resources is continuously active in this matter in the course of its normal day to day work. Bureau parties on Royal Australian Navy vessels take every opportunity to obtain samples from the seabed which are studied in the Bureau’s laboratories.

In a search which is just beginning in the Bougainville area similar action will be taken by the members of the Bureau field party which will operate from a small vessel.

It is important to remember that all regional geological mapping work of the Bureau is relevant to the search for phosphate as to other minerals, and the field parties and laboratory staffs are continuously alert for indications of phosphatic occurrences.

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Senator BISHOP:

– I direct a question to the Minister representing the Minister for Social Services. When is the Minister likely to review the provisions relating to social service benefits as applied to inmates of mental and associated convalescent hospitals, which provisions deny to those patients direct pension payments? Does the Minister consider that there is a special case for normal social service payments in instances of satisfactory recovery of good health and where a patient performs various light duties beneficial to himself and to the institution?


– The broad answer to this question is that it has been normal practice over the years for social service benefits and associated matters to be reviewed when the Budget is being prepared. Any particular aspect of social services that an honorable senator wishes to be considered should be represented to the Minister for Social Services so that it can be considered during that review. For that purpose, I will direct the honorable senator’s question to the Minister.

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Senator COOKE:

– Can the Minister representing the Treasurer explain the extraordinary delay that has taken place in furnishing a reply to a question that I placed on the notice-paper on 24th November 1964 in relation to the Defence Forces Retirement Benefits Fund and various deficiencies in the operation of that Fund?

Senator HENTY:

– I must apologise to the honorable senator. I will take up the matter immediately with the Treasurer to find out why an answer has not been given and to try to facilitate one.

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– Yes. It should be understood that anti-dumping provisions are quite separate from the normal protective tariffs. When goods are put on the Australian market at a price below the normal price in their country of origin, that is unfair competition. In fact , it is dumping. It should be understood that quite a deal of effort is necessary to establish what is the normal domestic or f.o.b. price of an article in another country. This often takes a considerable time. The principle of antidumping legislation is to impose a duty over and above the normal duty so as to offset the difference between the normal domestic or f.o.b. price and the price at which an article is put on the Australian market for sale. I stress that there is a distinct difference between a dumping duty and a normal protective duty. The dumping duty is imposed when goods are offered for sale here at prices below the normal prices in the country of origin.

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– I direct my question to the Minister representing the Minister for Social Services. Is he aware that in the 1963-64 Budget an initial provision of £15,000 was made for the accommodation of disabled persons but that no grants had been approved to May 1964 and that it is expected now that no advances will be made from this fund? Knowing the Minister’s particular and personal interest in handicapped persons, I ask him whether he will look into this matter so that wider scope may be given to the fund and so that centre industries and spastic and sub-normal children’s organizations will be eligible to apply for assistance?


– I shall refer the honorable senator’s question to the Minister for Social Services and obtain an answer as quickly as possible.

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Senator SIM:

– I direct a question to the Minister representing the Treasurer and preface it by saying that I have received complaints that the trading banks are severely restricting advances to primary producers in Western Australia for both carry-on and development purposes. Will the Minister ascertain whether the action of the trading banks is due to a direction by the Reserve Bank of Australia or whether it is a trading bank decision? Will the Treasurer take this matter np with either the Reserve Bank or the trading banks to ensure that primary producers are able to continue to obtain adequate finance?

Senator HENTY:

– I shall certainly refer the honorable senator’s question to the Treasurer. It is often difficult to ascertain whether such decisions emanate from the trading banks. Managers of trading banks are human beings and rather than saying in Jack Blunt style to a client, “ We do not think you are creditworthy “ they often resort to saying, “ We are acting under a Commonwealth directive “. If this is not so in the case mentioned by the honorable senator - and his question rather suggests that there may be cases like this - I shall ask the Treasurer to inquire into the position in Western Australia. At this stage, no-one would wish to see primary producers denied necessary funds to develop their properties.

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– I direct a question to the Leader of the Government in the Senate. Is the Minister aware that public servants in New South Wales have been granted four weeks recreational leave by the New South Wales Government? Is the Minister also aware that the new South Australian Labour Government is pledged to implement four weeks annual leave for South Australian public servants as a result of the recent South Australian elections? Will the Leader of the Government ensure that the Commonwealth Government is not found wanting in this connection and is prepared to recommend to the Commonwealth Public Service Board that Commonwealth public servants be granted four weeks annual leave?


– I think it would be entirely in error to regard as necessarily correct any action taken by the New South Wales Government or for that matter any action that is proposed by the South Australian Government. As every honorable senator knows, the Commonwealth Public Service has its own procedures for establishing terms and conditions of employment. Its procedures will be adhered to in the future as they always have been.

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Senator AYLETT:

– I direct a question to the Minister representing the Minister for Immigration. I would like to ask him whether, as alleged in a statement issued by the Minister for Immigration at the Australian Citizenship Convention, there are about 250 undesirable migrants in Australia who will not receive naturalisation papers because the Department of Immigration will oppose applications for them? Can the Minister inform the Senate whether this statement is true, and will he give all the reasons why these migrants would be classed as undesirable migrants? Would migrants who boast of the fact that they are foreigners, who say that they are proud of that fact and intend to remain foreigners, and who threaten to murder people who say anything that displeases them - such as one migrant I can bring to mind, Manus Vasiliou - be classed in the category of undesirable migrants?


– I cannot accept the generalisations made by the honorable senator in relation to this matter. Every migrant is regarded as an individual case by the Department of Immigration. I do not think the honorable senator can generalise in this regard. I do not consider it is appropriate or proper that he should make the statement that he has just made in relation to violence. In my opinion, such a statement is quite unfair and does a grave injustice to the great number of migrants who have made a real contribution to the magnificent development that has taken place in this country.

Having said those things, 1 will refer the honorable senator’s comments to the Minister for Immigration.

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– I direct a question to the Minister representing the Postmaster-General. Can he inform me as to the reason why a telephone call from Adelaide to the eastern States is delayed an hour and a half from the time it is booked, and why it is necessary for the telephonist to ask the caller to limit the conversation to six minutes? Can he assure me that immediate remedial action will be taken?


– This quite clearly is a departmental matter. I will have the question directed to the Postmaster-General for the purpose of getting an answer for the honorable senator.

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Ministerial Statement

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– by leave - Mr. Deputy President, a statement was made this morning by the Treasurer (Mr. Harold Holt) in another place with reference to the Commonwealth Superannuation Fund. The statement is as follows -

I am now able to give some information regarding the disposal of the surplus revealed at the last quinquennial investigation. Honorable senators are keenly interested in the well-being of the Commonwealth Superannuation Fund. At the request of the Treasurer, the Secretary to the Treasury conferred with organisations of Public Service employees immediately after the report of the eighth quinquennial investigation of the Fund was tabled in the Senate during the last sittings and again as recently as last week. This is the first occasion upon which such a large surplus has been disclosed in the Fund. As can be seen from the report, it has largely arisen from the increased earnings of the Fund in comparison with the assumed rate of earnings of 33/4 per cent when the rates of contribution were calculated. Put shortly, rates of contribution to the Fund have been higher than they would need to be if they had been based on an expectation of earnings at the levels which were actually reached during recent years and the levels which can be reasonably expected for at least quite a few years ahead.

The Superannuation Board was not unanimous in its view about the best and most acceptable method of utilising the surplus and this was an important reason for consulting with the Public Service organisations. I am informed that they have expressed agreement with the decisions which the Government has now reached and which 1 will outline to the Senate. These decisions will not only result in distribution of the surplus already accrued, but will also accept the position that the higher earning rate recently achieved is likely to continue. The Government clearly could not wish that contributions should continue to be paid at rates higher than those that are judged to be necessary to ensure that the Fund is able at all times to provide the benefits prescribed. Accordingly -

  1. New rates of contribution to take effect from 1st July 1962 are now being calculated. These will be based on an assumed earning rate of 51/2 per cent, for the ten year period to 30th June 1972 and 41/2 per cent, thereafter, with appropriate provision for contingencies. These earning assumptions will be subject to review at the next actuarial investigation at 30th June 1967, in the light of circumstances then existing.
  2. The difference between the newly calculated contributions and the contributions already paid after 30th June 1962 will be rebated or refunded if contributions have not already been refunded.
  3. In the light of the new assumptions about earning rates and the introduction of new contribution rates, the Commonwealth Actuary will re-assess the state of the Fund at 30th June 1962. The portion of the revised surplus then disclosed that is attributable to contributors, together with earnings from 1st July 1962 in relation both to their portion of the surplus and to overpayments of contribution, will be rebated or refunded if contributions have not already been refunded.
  4. A cash distribution will be made to pensioners of the share of the revised surplus at 30th June 1962 attributable to them and subsequent earnings thereon.
  5. Contributors to the Provident Account will be credited with interest from 1st July 1957 at the average rate earned by the Fund in each financial year.
  6. A cash payment will be made to the retired contributors to the Provident Account of the additional interest earned on their contributions.

Legislation to give effect to the Government’s decision will be brought down as quickly as possible but, as I have indicated, the actuarial calculations are complex and the other administrative arrangements will necessarily take some time to complete. It will not, therefore, be possible to incorporate the new rates of contribution in the legislation but, to avoid any subsequent delay, authority will be sought for the making of regulations to prescribe appropriate rates of contribution and rebates or refunds as soon as the final actuarial calculations are available. Any amounts that would have been payable to pensioners or contributors who are now deceased will be paid to their legal personal representatives.

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Minister for Customs and Excise · New South Wales · LP

– by leave - Mr. Deputy President, my attention has been drawn to a statement made in another place that shirts from Hong Kong are being dumped in Australia. I have had some inquiries made into this matter and have been advised that so far no dumping complaint has been lodged with my Department. I have arranged for my departmental officers to extract certain statistics concerning imports of shirts from Hong Kong. However, it would seem appropriate that, if the Australian shirt manufacturers have evidence that shirts are being sold to Australia by Hong Kong exporters at unfair prices and that these sales are causing substantial injury, they should lodge a complaint with my Department under the Customs Tariff (Dumping and Subsidies) Act. I give an assurance that, if such a complaint is lodged, immediate steps will be taken to establish whether a dumping situation exists and, if so, that protective measures available under this Act will be promptly invoked.

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Minister for Customs and Excise · New South Wales · LP

– by leave - Honorable senators will recall my reply to a question without notice last week in respect of an American periodical called “ Fact “. In my reply I indicated that I would examine the circumstances of the prohibition which, as I stated, extended to four issues. Having examined all four issues, I am not prepared to alter the decision in respect to three of them. However, I have decided to reverse the decision taken in respect to volume 1 No. 6, the issue featured in “ Nation “ magazine, and to release the issue. These magazines are published bimonthly. Each issue as it arrives is examined on its merits and is dealt with on an individual basis.

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Ministerial Statement

Debate resumed from 23rd March (vide page 60), on motion by Senator Gorton -

That the Senate take note of the following paper - Foreign Affairs - Ministerial Statement, 23rd March 1965.

Senator McKENNA:
Leader of the Opposition [11.41]. - The Senate now has before it the statement made on Tuesday last by the Minister for External Affairs (Mr. Hasluck · Tasmania

, dealing with the world situation. His statement was repeated in the Senate by Senator Gorton, the Minister for Works, who represents the Minister for External Affairs in this chamber. Very properly, the Minister dealt with the situations in Vietnam and in Malaysia. They certainly are the most important aspects of world affairs at present, not only to us, but to everybody. On 18th August last we had before us a paper dealing in particular with events in Vietnam. The paper was issued at the instance of the Minister for External Affairs and dealt primarily with incidents that had taken place at about that time in the Gulf of Tonkin. Unfortunately, the debate was not pursued owing to the fact that there was a flood of end of session legislation from the Government.

I rely only upon my memory, but I think I was the only speaker on the subject, apart from the Minister who floated the statement. That may not be correct. I do not assert it with authority, but I think that was the case. At all event’s, there was no adequate debate at that time on the problem. The position then before us was serious. The position today in our part of the world is even more serious. I think it justified the comment made by Mr. Calwell, the Leader of the Opposition, on Tuesday last when he said that Vietnam presents the most potentially explosive situation the world has had to face since World War II. I think that states the position accurately.

On 18 th August last I spoke at very great length on the internal situation in Vietnam and the events that led to the development of the Vietcong and the front for the liberation of South Vietnam. I feel that relieves me from the necessity- of traversing any of that ground again. But the situation has changed very greatly since I last spoke on the subject, in August. Some of the factors that come to mind are those: In the interim we have seen the political scene change time and time again in South Vietnam. One government- is removed and another one substituted within weeks, or even within days of each other on occasion. All this takes place primarily at the instance of generals in the South Vietnamese army. If they expended as much energy in overcoming the troubles that they encounter inside and outside their own country as they do in meddling in the establishment and removal of governments, perhaps we might have a happier situation in that country. The end result is that there is no political stability. The leaders who are directing operations are not chosen by the people. They are not elected. There are all the divided elements to which I referred in August operating amongst the South Vietnamese.

There is on the one side the Vietcong with its supporters - those who support it by conviction and those who are forced to support it through coercion and terror - and on the other side there are the religious groups and those with rival political outlooks. Together they make for a situation of complete instability which, after 20 years of war in that country, must necessarily leave the unfortunate South Vietnamese in a state of helplessness and uncertainty. It is a wonder to me that they can be marshalled at all to make any kind of reasonable effort. This is a factor which we have to keep in mind all the time when we consider the position in South Vietnam.

In the interim the Vietcong has become far more daring and, unfortunately, far more successful. Even in the last twelve months it has stepped up its operations attacking airfields and military installations in South Vietnam. I recall an incident when the barracks of American advisory personnel were bombed and blasted, and when many men were injured or killed. Those attacks have been intensified enormously. Until quite recently the Americans had in Vietnam personnel in an advisory capacity only. One must make an exception in respect of the incident in the Gulf of Tonkin, when America attacked North Vietnamese installations in reprisal for attacks on its warships on the high seas by North Vietnamese torpedo boats. The United States took the position that it had advisers in South Vietnam and that the South Vietnamese, under their Government - of the character I have described - were responsible for the war effort and were directing it. The view was that the Americans were not active participants, although they certainly suffered casualties. But that position has changed.

Following attacks on South Vietnamese airfields, there are now some 3,500 combatant American troops in Vietnam, guarding airfields and strategic posts. They will be involved in a very active military way. In addition, American fighter aircraft are giving protection to bombers from South Vietnam in their excursions over and their dropping of bombs on North Vietnam. We have the new development that, in quite recent times, South Vietnam has gone outside its own country. It is proceeding to demolish bases in North Vietnam and is dropping bombs on and strafing supply lines between North Vietnam and South Vietnam. That constitutes a decided stepping up of warlike activities in this area.

Only on Monday of this week we learned, in rather startling form, about what was claimed to be the liberation of gases on the North Vietnamese and the dropping of incendiary bombs. There was a big emotional content in the way that that was presented to the world. I merely mention that matter now and will come back to it a little later. One further change in the situation was the explosion of a nuclear bomb by the Republic of China on 18th October 1964. That was a regrettable event. It was an event dangerous to the world. The extension of atomic power to a country of the magnitude of China, with its vast resources and vast population, creates an entirely new situation in world politics. That great power dominates the scene in Asia at the present time and its moves in any matter are of the utmost significance. These are all factors which have changed since we last addressed ourselves to the subject of SouthEast Asia.

It is exceedingly difficult to have knowledge, with certainty, of events that transpire in this area. We in the Parliament even have to rely very largely upon Press reports. From time to time they arc sensational and highly coloured. One hesitates to form a judgment upon them until, after a lapse of time, the truth gradually has emerged in official statements and in statements from quite independent sources.

One of the great difficulties that confronts anybody addressing his mind to the problems of South Vietnam is that it is so difficult to get a clear picture of exactly what is happening. At this stage I refer to two new developments in the area. We have been advised that the United States of America is moving its nuclear powered fleet out of the Atlantic Ocean and into the Pacific Ocean. The fleet - a great aircraft carrier and supporting ships - is being reconditioned and repowered and is to move into the Pacific area. That is a projection of vast power into the proximity of South East Asia and, perhaps, into the Indian Ocean. It is a major factor in the situation which is developing. It shows that America feels that the situation has quietened in Europe and that the centre to which we are now addressing ourselves is the real potential danger to world peace now and in the foreseeable future.

We were advised on 11th January that Britain is now to concentrate upon South East Asia. It was reported then in the Press that the British Government had decided to shift the full weight of its defence strategy to the Far East, particularly South East Asia, and that the Government had decided that, with European security guaranteed by the East-West nuclear stalemate, the first priority of its future defence policy must focus east, of Suez. The report said that the Government is now engaged in a sweeping review of its defence policy and strategy, and that decisions would be made known in a white paper’ on defence to be tabled on 16th February. Of course, that involved a very drastic re-assessment of the world political situation. It was reported that, in the British view, the main danger to peace has shifted from Europe to the Far East, notably to Vietnam and Malaysia, and that Britain has built up a South East Asia force of 50,000 men supported by aircraft carriers, other warships and V-bombers.

Continuing on that theme, I now refer to the White Paper that was tabled in February. I shall quote two brief passages from the Statement on the Defence Estimates 1 965 “. On page 7, the following paragraphs appear -

  1. The only direct threat to our survival would be a major nuclear war arising from a direct conflict between East and West. This can be almost entirely excluded as a result of the present state of mutual deterrence, and bearing in mind the high risk that any conflict in Europe would escalate, deliberate aggression, even on a limited scale, is unlikely in this theatre.
  2. An evolution in both Soviet and Western thinking, brought about partly by increased understanding of the consequences of nuclear warfare, has therefore much reduced the likelihood of war between the Soviet and the Western alliances and gives grounds for hope of progress in the limitation and control of arms and of a still more stable relationship.

The other portion that I should like to read is under the heading “Peacekeeping outside Europe “, on page 8 of this document, where it is stated on behalf of Britain -

Outside Europe we have treaty relations and commitments which we must honour. We maintain substantial forces for this reason and because we have a major interest in the stability of the world outside Europe, in its economic prosperity and in its peaceful development. These purposes we share with our allies and our forces serve their interests as well as ours. Experience has shown that it is neither wise nor economical to use military force to seek to protect national economic interests in the modern world. Nor is it the purpose of our forces to hold overseas territory for Britain, as our record of decolonisation shows. In maintaining these interests in peace and stability, which our allies share with us, the British contribution is paramount in many areas east of Suez. Here, as elsewhere, we have obligations to our Commonwealth and other allies and here we have facilities in our bases at Aden and Singapore. Our presence in those areas makes a substantial contribution to international peacekeeping.

The statement goes on to say, in paragraph 20-

It would be politically irresponsible and economically wasteful if our bases were abandoned while they are still needed to promote peace in the areas concerned, though we recognise that they can be maintained only in agreement with the local governments and peoples. Our presence in these bases, our Commonwealth ties and the mobility of our forces permit us to make a contribution towards peacekeeping in vast areas of the world where no other country is able to assume the same responsibility.

Of course, looking at Britain’s position in the Far East, we see it concerned particularly with India, Burma, Vietnam and the adjoining countries, and Malaysia - the newly formed, most recently decolonised Commonwealth country, which is in a good deal of peril and turmoil at the moment. I have given a broad picture of the great changes in the scene that have taken place in relatively recent months. We of the Federal Parliamentary Labour Party addressed our minds to this in Sydney on 18th February last when, following a meeting of the Foreign Affairs Committee of the Party, the Federal Executive of the Party made a pronouncement on the situation as at that time. Even since that date the situation has changed quite dramatically. So whilst in some respects it may be claimed that the statement addressed itself to a different situation, very much of what was then said records the outlook of the Opposition in relation to Vietnam and Malaysia. I propose to read it to the Senate.

Senator Morris:

– What was Hie date of that statement?

Senator McKENNA:

– It was made on 18th February 1965. It has been circulated through our Federal Secretariat. It is readily available through the Federal Secretariat to anybody. It was not given the complete publicity that I thought it deserved in the Press of Australia. As it was the considered view at that date on the situation as it then stood, I propose to read it to the Senate. It is not short; it is some two pages long. In the interim the statement has been ratified by the Federal Parliamentary Labour Party itself. This was the outlook of the Party on that date. I shall take the position from there later. It begins -

In its statement to the Security Council on February 7th, reporting the air strikes against military installations in the south of North Vietnam, America insisted that its object in South Vietnam, while resisting aggression, is to achieve a peaceful settlement maintained by the presence of international peacekeeping machinery and that it would not allow the situation to be changed by terror and violence.

This statement of American purposes is unexceptionable and the case for the American action of recent days, as based on the aim of shortening the war and achieving a negotiated settlement, which would establish and maintain the rights of the South Vietnamese people, deserves sympathetic Australian understanding.

At this moment it seems clear that President Johnson is determined to limit the area of American retaliation to the factors believed to be assisting the Vietcong attacks, and that he is resisting the bellicose and lunatic urgings to launch all-out war against North Vietnam.

At the same time many responsible voices are being raised in America, notably that of the Democratic majority leader, Senator Mike Mansfield, to promote new efforts to halt the drift of war over Vietnam, and similar efforts are being made by world leaders, notably U Thant, the United Kingdom Foreign Secretary Mr. Stewart, who has branded the war as cruel and unnecessary, the Canadian Prime Minister, Mr. Lester Pearson, and the Governments of India and of France.

Australia should be supporting these efforts with all its might. It is a tragic fact that the Australian Government is not doing so but, on the contrary, is merely applauding the military measures, encouraging further military measures and persisting in the impossible attitude that Vietnam poses purely a military problem, which can be solved by a military victory alone.

The moment is propitious to use every endeavour to bring about a cease fire now. The possibilities otherwise, with retaliation and counterretaliation becoming progressively more massive and involving even more countries, are incalculable for the whole human race.

The Australian Government is betraying the Australian people by its refusal, or failure, to support the efforts of U Thant, United Nations Secretary General, in this direction as set out in his statement of February 12th “ to shift the quest for a solution away from the field of battle to the conference table.”

The difficulties which, as U Thant frankly states, stand today in the way of a United Nations solution to the problem, make it the more urgent that the Australian Government should be using its best endeavours to this end with all the Governments concerned.

Instead, the Australian Government appears to prefer to line itself with the mad-headed and extremist elements, both in America and in other countries, which are seeking to push their Governments to the very brink of total war.

On behalf of Canada, Mr. Lester Pearson has stated unequivocally that his Government would be glad to take part again in a Geneva-type conference to seek a peaceful and enduring solution to meet the object of the 19S4 agreement, namely adequate provision for the independence of all the former countries of French Indo-China. Australia should take its part in promoting such a conference, recognizing, as Mr. Lester Pearson has made clear, that the hopeless alternatives are to allow things to go on as they are or for the use of massive American and Vietnamese force against Communist bases in the north every time there is a Vietcong attack in the south or else a full-scale far-eastern Chinese-American war.

It is worth noting that the convening of such a new conference on Indo-China would be in conformity with the Declaration of the Cairo Conference of Non Aligned Nations in October, 1964’.

The demand of the Soviet Government for the immediate departure of all American and other foreign forces from South Vietnam would be in the interests neither of the people of South Vietnam nor the people of Australia. Its immediate consequence must be a Communist takeover of South Vietnam, snuffing out the hope of freedom and the democratic independence in that country and extending the area of Communist control closer to this country.

The presence of those forces is necessary and justified as a holding operation provided that all efforts are bent towards the objects set out by the American Government in its message to the Security Council. In other words, the presence of these forces is justified as a temporary means to an end and not an end in itself.

The object must be, at a proper time and in circumstances enabling the people of South Vietnam a free choice, to allow them to decide by their own votes on their own government and to ensure the physical independence of that government.

It is utter delusion to pretend that any such government now exists in South Vietnam or that the people have any chance of exercising such a free choice in existing conditions.

It is equally delusion to pretend that there is any real hope of attaining in South Vietnam the free and independent democratic government which Australia would like to see there unless Western support is withdrawn from the forces of reaction, oppression and tyranny in that country and unless a programme of full scale economic and social assistance is implemented without delay for its wretched people who have obviously no reason for interest or enthusiasm in taking sides in the struggle now proceeding there.

The position remains true that co-operation between Australia and America in these areas is of crucial importance and must be maintained. This in no way affects Australia’s right and duty to ensure that the policies pursued in this area are in accordance with the principles of the United Nations Charter and the Declaration of Human Rights.

I think the Senate will agree that the Opposition really addressed its mind to the situation that was before it at that time.

Senator Mattner:

– The honorable senator forgets one thing - the attitude of North Vietnam. There is a treaty by which the North Vietnamese have agreed to abide by the division of Vietnam at the 17th Parallel, but they have broken it consistently.

Senator McKENNA:

– No one argues about that. North Vietnam has been intransigent and has been sending infiltrators and supplies into South Vietnam for purposes of subversion. She has caused the whole trouble. I am not arguing about that, but that is not the only factor in the situation. There is the internal situation in South Vietnam, which cannot be disregarded. There is no governmental stability, there are divided elements of all types, there is terrorism and coercion, there is internal subversion and there is vast difficulty in isolating the enemy and dealing with him. These are people of one race. They merge together, despite their differences of ideology and the rest.

Senator Anderson:

– Does not the honorable senator think that the statement he has read tends to over-emphasise the problems of South Vietnam and ignore the real threat of the aggressor from the north?

Senator McKENNA:

– Oh, no. The statement frankly acknowledges that threat. I was about to refer to what has happened since 18th February. That leads right to the point the Minister has raised. Since we issued that statement there has been an enormous stepping up of activity on both sides. As I said a while ago, the Vietcong has became infinitely more effective. lt is better armed, it has more modern weapons and it has become far more daring and, unfortunately, far more successful. On our side, there has been a stepping up of the bombing of North Vietnam which may well be designed, as we have been told, merely to halt the infiltration of men and the delivery of supplies from North Vietnam. If it has the desired effect and if it does succeed in stopping infiltration and the delivery of warlike supplies to the Vietcong, it will be proclaimed as a great piece of wisdom and a wise decision. When that happens, one of the mainsprings of the trouble will be eliminated altogether.

What we have to consider is this: If it fails and attacks on Vietnam are intensified to a point where they cause Chinese intervention and war with the United States of America, it will be the worst kind of world disaster. It is going to be very difficult for anybody to determine exactly where that flashpoint is - the point that might bring in Russian troops or Chinese troops and arms and extend the present situation into a world holocaust. That is a real danger. That is why we of the Australian Labour Party are so very concerned that our allies should move in that area with great caution and with great restraint.

Now we have a new element in the situation - the use of gases and incendiary bombs. This is a vital matter even if we accept that these gases and bombs are as they have been described by spokesmen for the United States Government. In this context the Minister for Defence (Senator Paltridge) said only yesterday that the gases have been used only two or three times and most recently on 27th January. The Minister said that they were not lethal and that they had disabled only temporarily, and he added -

There is no confirmation as yet that phosphorus bombs have been used, although, of course, it should be understood that phosphorus is an element which is used in a variety of weaponry including, for example, smoke markers and illumiMating flare’! A phosphorus bomb is no different from any other type of incendiary bomb used to ignite structures of various types. It would appear, therefore, from what has come officially to notice that the gases which have been used have not been lethal gases. They have been gases of a type used to disperse rioting crowds in many places in the world. The gas has been used by the Vietnamese only.

That is reassuring as far as it goes. The Government has indicated that it has made approaches to official sources in the United States asking for exact information as to what has been going on with gases and incendiary bombs, particularly phosphorus bombs, and I believe the Government has indicated that it will make that information available when it comes to hand. 1 hope that some member of the Government will be able to rise in this debate and give us and Australia the fullest information upon this point because my own reaction to the news seems to have been pretty common everywhere. The news presented on Monday about phosphorus bombs and gases and the way it was presented aroused in me a terrific revulsion against the use of both.

Senator Wright:

– It was surprising that the news should flare up in that way on 20th or 22nd March in relation to incidents which we were told happened as far back as 27th January.

Senator McKENNA:

– I agree, but I feel that in commonsense, one must approach that aspect of the situation with restraint until the facts are established. The projection of news of that type in the form it came to us does a disservice because of its explosive effect on the emotions.

Senator Wright:

– If the news channels have distorted it, they are bordering on subversion.

Senator McKENNA:

– I agree with that entirely. The news was certainly presented in lurid fashion.

Senator Wright:

– If the Press representatives do not report this debate they should not be in the gallery of the Senate.

Senator McKENNA:

– I offer no comment on that but I do seriously put to the Senate that we should all reserve judgment on this matter until we know clearly the facts. We should not form emotional judgments.

Senator Morris:

– The trouble is that the Australian people are not permitted to do that because of these reports.

Senator McKENNA:

– If the reports are untrue or incorrect, a serious disservice has been done to the cause of peace all over the world because people will have erupted emotionally in all countries. There are signs of that everywhere. The onus is on the Government to bring to the people authoritative information on this matter at the earliest moment and I hope that some Minister will be in a position today to rise and convey to us the most complete information that is available to the Government on these aspects.

T put it to the Senate that it is quite clear that the United States of America cannot withdraw from South Vietnam and leave a vacuum that would be filled instantly by the Communist North supported by Communist China. The Americans simply cannot do that because the same process would be repeated in Laos and Cambodia. The United States refuses to negotiate, as I see the situation, until infiltration and subversion from North Vietnam cease. On the other hand, North Vietnam will not negotiate until the United States and all its forces withdraw. At that point the two sides come to a complete deadlock, but in the light of all the circumstances - the massing of enormous military potential in the area, the stepping up of activity, the emotive disturbances as a result of the recent Press campaign and information from the area - it is more than ever necessary that negotiations begin at an early date.

The power of the U.S.A. is well enough known and understood. It does not need a physical demonstration in North Vietnam to establish its power. Since it is well known and well understood, there is no need for a practical demonstration of it. lt might be necessary in the view of the Americans to drive the point home to the North Vietnamese people themselves, but there is always that flashpoint to be avoided and nobody can say with any degree of certainty just where it lies. That is the danger we see in this situation. It seems to me that, knowing the power of the United States, the North Vietnamese and those behind them are testing the will and nerve of the Americans. If one understands that, perhaps there could be saner methods of establishing the nerve, and will of the United States, other than by dangerous excursions. It is very difficult to know what to do. The Opposition regards the plight of those concerned with the action in South Vietnam with real sympathy. We appreciate the difficulties of knowing how to do the right thing and when to stop following a particular course of action. There have been calls from all over the world for talks on this situation, for the cessation of all hostile activities and for the commencement of negotiations. One of the leaders in that move was U Thant, the Secretary-General of the United Nations, who, as reported in the “New York Times” of 13th-14th February made a call for such talks. f regret that I cannot refer to the Senate a record of his televised address as published in any United Nations journal because I have not been able to locate it in the Parliamentary Library. Therefore I am relying on the reports published in the “New York Times” of 13th-14th February. The article reads -

Secretary-General U Thant called today on the parties in the Vietnam conflict to move “ from the field of battle to the conference table.”

In a statement, Mr. Thant said it was a matter of urgency to get talks started among the principal parties and to pave the way for wider and more formal negotiations.

The Secretary-General did not identify the parties he addressed, but his words obviously were directed at the United States, North and South Vietnam, Communist China and the Soviet Union.

The report continues -

The Secretary-General declared that a positive solution could be pursued “ within or outside “ the United Nations, but he pointedly recalled that several times he has urged a revival of the Geneva Conference held in 1954, when former French Indo-China was divided into Cambodia, Laos and Vietnam. Fourteen States, including Communist China, attended the Geneva negotiations.

Mr. Thant acknowledged his own powers under Article 99 of the Charter to ask the Security Council to take up the Vietnamese war as a conflict threatening peace, but he warned of the “ many difficulties “ in attempting a United Nations solution.

Neither Communist China nor the divided States of North and South Vietnam are members of the organization. Last August, North Vietnam refused an invitation from the Security Council to participate in a debate here on the incidents involving United States vessels in the Gulf of Tonkin.

There is a call from a man whose whole purpose in life is to help in preserving the peace of the world. He asks that there be talks whether within the framework of the United Nations or outside it. Countries such as France, through its President, India, the United Kingdom and Canada are calling for these talks. But the voice of Australia is silent. Even though we are intimately bracketed with our ally, the United States, surely we have a responsibility of our own to declare our position in relation to the institution of talks that will start a cessation of hostilities and lead to a conference table where the various powers - powers independent of the struggle being includedcan get down to discussion.

Senator Wright:

– Was not that the purpose of the United States message to the United Nations Security Council to which the honorable senator referred in the Labour Party’s statement?

Senator McKENNA:

– Yes. The difficulty, as the honorable senator will know, and to which U Thant has referred, is the state of the United Nations today to act.

Senator Wright:

– But to recognise that by going to a peace table and ignoring the United Nations would practically certify its death. That is almost as disastrous as the crisis that the senator is properly impressing on us.

Senator McKENNA:

– All I can say in reply to Senator Wright is to repeat what U Thant is reported to have said. He said that this matter can take place either inside or outside the United Nations.

Senator Wright:

– The United States has tried to get this matter inside the United Nations, has it not?

Senator McKENNA:

– The United States has reported the incident of the Gulf of Tonkin-

Senator Wright:

– For the purpose of the Security Council taking cognisance.

Senator McKENNA:

– That is right. The United States reported that matter for the purpose of the Security Council taking cognisance and, if necessary, action. Unfortunately, it got nowhere. There was an opportunity for North Vietnam, if the Communist powers wished it, to come to that body and lay the facts before it. The matter could have been taken from there.

Senator Mattner:

– They would not come.

Senator McKENNA:

– I do not agree with the proposition. I would say to Senator Mattner that arrangements outside the United Nations in a matter like this made at the call of the Secretary-General would be disruptive to the United Nations, because the Charter itself provides for parties making regional arrangements and even engaging in active defensive action in certain situations without reference to the United Nations. So, I would not be alarmed if some of the great powers like Britain, India, France and others, sponsored a call to meet and were able, with back door diplomacy, first, to arrange for the parties to come together. I think it would be a very suitable thing. That is what we think ought to be attempted. Our criticism of the Government is that it is not in public using its endeavours to that end. Its voice ought to be heard on this matter. That is the view that the Opposition takes.

Senator Hannaford:

– Do you suggest that that would be within the Charter of the United Nations?

Senator McKENNA:

– No, I do not care which way it takes place, whether it is done by persuasion of the great powers or independent powers or otherwise, or through one of the agencies of the United Nations. We know the difficulty that the United Nations is in. It is bogged down at the present time. It is most unfortunate for the world that this is the case.

I have spent far more time on Vietnam than I had intended. I should like, before I conclude, to refer to the position between Indonesia and Malaysia. I spoke on that matter on 18th August and, accordingly, I can be briefer than I otherwise would. Here again, we see enormous changes since we last discussed the matter. There is the very regrettable withdrawal of Indonesia from the United Nations announced on 31st December last and given effect on 21st January of this year, just over two months ago. This withdrawal was put on the grounds of objection to Malaysia being given a seat on the Security Council, a matter that had been prearranged. It was put on grounds also that the United Nations was merely a tool of the neo-colonialist powers. It is most unfortunate that Indonesia should have taken that course and stepped outside the United Nations. Allied with that would appear to be the greater and closer alliance that Indonesia, in the meantime, appears to be building with Communist China. Nobody at the moment is able to gauge the full impart of the frequent and more ready contact between the two countries. But it is not a cheery prospect for Australia to look at.

We are now in the position where, in the interim, Australian troops are involved in Borneo in active confrontation of Indonesian troops across the border. I am quite sure that we all deplored the news that we received last night that an Australian sergeant was killed and a number of our men were injured in a bomb explosion from a booby trap or something of the kind. This has introduced a significant and new element into the situation. The United States has expressed its disapproval of Indonesia’s aggression but quite obviously leaves it to Great Britain or members of the Commonwealth to provide defensive action. We have seen, too, in the interim, the taking over in Indonesia of foreign owned assets such as rubber plantations and oil installations on terms that are not precise or clear to us at the moment. We do not know whether any kind of compensation to the people who were dispossessed is contemplated. This action aggravates the feeling between countries like America, the United Kingdom and others against Indonesia. It widens the breach. It creates international tensions and troubles. One cannot but have sympathy for a young emerging nation which is in economic difficulties from a desire to acquire and exploit its own natural resources. One must have a degree of sympathy for it, but one expects that type of thing to be done without violence or in consonance with the principles of justice. It is a new element that has arisen acutely in the meantime.

We have had unfortunate and uncivilised behaviour in the form of attacks on United States information centres in Indonesia, with the result that America has now completely withdrawn those centres from that country. These are all things that have worsened the international situation generally. I have already referred to the great strengthening of United Kingdom forces in the area and the fact that the United Kingdom is concentrating increasing power in the area. The United States of America is doing likewise.

On 12th January last our leader, Mr. Calwell, suggested that, having regard to the fact that Indonesia’s hostility to Malaysia rested at least partly upon her claim that she felt herself to be encircled by Malaysia, which is a Commonwealth country, by the United Kingdom which has bases in the area, by Australia and New Zealand to the south, and by British and American aircraft deployed around the Indian Ocean and the seas within the proximity of Indonesia, some of the great powers involved - that is, Britain, the United States of America, Australia and New Zealand - might at least answer that point by saying to her: “ Stop aggression and we will join in guaranteeing your territorial integrity”. When Mr.

Calwell advanced that proposal he said that he was not optimistic about its acceptance, but its significance lay in the fact it pointed out to the world what the powers that President Sukarno professed to be fearful of were prepared to do. If accepted, it would have killed one of his great propaganda points. It is quite clear to us that none of the great powers that I have mentioned, including Australia, has the slightest interest in Indonesian territory nor any desire for other than the utmost friendship and goodwill. We take exception to only one thing - Indonesia’s unprovoked aggression against Malaysia.

Senator Wright:

– Has not each of those allied countries announced that attitude?

Senator McKENNA:

– Yes, but Mr. Calwell suggested that it take the form of an offer to enter into a formal treaty with Indonesia. I noted with very great pleasure that the idea was applauded in Press editorials throughout Australia. I was disappointed when the Minister for External Affairs said that he had no comment to make upon it at the time. He has since made no comment upon it, not even, as I recall it, in the statement that is now before us. To make such an offer is one thing which could be done. It would be evidence of good faith to put that to Indonesia and to do so before the world. I ask some Minister to state whether the suggestion has been seriously considered by the Government and, if so, whether it has been rejected or whether the Government will act upon it

It might not be difficult to get those four allied powers together; but it might be difficult, as Mr. Calwell acknowledged, to arrange a meeting with Indonesia. At least, if the offer were made it would take away one of Indonesia’s great propaganda points. One realises that Indonesia would not like to accept largesse, as it were, or aid or comfort from powers which she has described in very bitter terms as being neocolonialist. That does create a difficulty, but in the situation that has arisen such an offer would be a very useful propaganda item. We must remember that war does not consist entirely of fighting. It includes also the winning of the minds and the wills of men. In relation to the South East Asian situation, it is necessary to win the minds and the wills of the people of Africa, and Asia - indeed, of the whole world. As has been said so often, peace is indivisible. If there is war anywhere, sooner or later everybody becomes intimately and personally involved.

This is what the Australian Labour Party said on 18 th February last on the subject of Indonesia and Malaysia -

Indonesia is the aggressor against Malaysia and is not respecting Malaysia’s independence.

Whatever Indonesia’s case and although the scale of aggression is small, the violation of Malaysian territory by force must be opposed.

The matter is one for the United Nations to keep the peace and to act as mediator, and the world needs the strength and authority of the United Nations in these matters.

The action taken by Australia to assist Malaysia’s defence up to this point is justified.

Continuance of such action requires the negotiation of a clear and public treaty between Malaysia and Australia with all possible speed.

Australia should initiate measures to restore peace and good relations in the area.

The Australian Government should offer its good offices in the arrangement of a conference for this object, a cease-fire being a condition precedent to the commencement of negotiations. Australia should seek the co-operation of the United Kingdom and New Zealand in these steps, and as the Tunku has already stated Malaysia’s willingness to confer on this basis, the Australian Government should use its utmost diplomatic endeavours in Djakarta to this end.

Further, the Australian Government should give active support to other proposals for mediation in this dispute, in particular that made by the Japanese Prime Minister.

Not only should the Australian Government make continuously plain to Indonesia its determination to resist aggression in this area; it should also be outspoken (1) in deploring Indonesian withdrawal from the United Nations and in persuading Indonesia to reconsideration of that ill-fated decision; (2) in condemning reckless provocations in speech and action by Indonesian leaders as have brought about the burning of Embassies and other outrages against civilised behaviour in Djakarta.

All Australian initiative should be exercised in the light that Indonesian-Australian friendship is not only possible but essential to the well-being of both countries, and we should press an offer to negotiate a friendship, trade and non-aggression pact with Indonesia at the earliest appropriate time.

To relieve Indonesian fears of encirclement, the proposal for a four-power guarantee of Indonesian security and independence, as put by the Leader of the Opposition, should be urged and we endorse the whole of Mr. Calwell’s statement in which this proposal was made. Such arrangements and guarantees should be regional pacts within the framework of the United Nations.

In the present situation, all present forms of Australian economic aid to Indonesia should be continued. Only where it is decided that such aid would clearly help Indonesia militarily against

Malaysia should it be discontinued. The overriding consideration should be the object of maintaining economic stability and assisting the Indonesian Government in raising the living standards of it people.

That is the viewpoint that we expressed quite recently and it has been affirmed by our Party.

In the time remaining to me I wish to quote several statements made by Mr. Calwell on Tuesday last. He said, speaking of our ally, the United States -

We want the American presence, strong and powerful, in Asia and the Pacific. We want it, because Australia needs it until all nations are prepared to disarm. It is precisely because we do not want America to be humiliated, because we want America to be in a position to negotiate from strength, that we are concerned about the dangers of her present course. We rest upon the repeated assurances given by President Johnson that he seeks no wider war. The Minister himself has quoted the President’s statements on this matter. A wider war can only have disastrous consequences for South Vietnam itself, for America and for the world.

Let me sum up. The war must not be widened. The United States must not withdraw and must not be humiliated in Asia. Therefore, there must be negotiations while there is lime to prevent both the widening of the war and any humiliation of the United States.

On three great issues, there is agreement between the two parties. These issues are: The American alliance, opposition to Communism, and the common determination to keep Australia safe and inviolable. But as to the means of achieving the best results on these issues, there is almost total disagreement. The foreign and defence policies of the Menzies Government are totally inadequate and, in most cases, not properly orientated, if the three objectives I have stated are to be achieved.

I commend those thoughts to the Senate.

Senator SCOTT:
Western Australia

– I congratulate the Minister for External Affairs (Mr. Hasluck) on the statement prepared by him and read out in this chamber on Tuesday night by Senator Gorton (Minister for Works). The statement covers a wide variety of subjects in particular spheres of interest in the world today. As Senator McKenna, the Leader of the Opposition in the Senate, has said, it is quite evident to all the nations of the world, and particularly to us in Australia, that the sphere of influence is now shifting from Europe, Russia and England to the South Pacific area and South East Asia. As evidence of this change there is, first of all. the recent announcement that the United States of America has decided to shift a section of its fleet, including one of its strongest and most modern aircraft carriers, to the Pacific area.

We now know that Great Britain is fortifying her bases east of the Suez. There is a reason for this action and it is not very hard to find, lt will be readily agreed - and I think the Minister for External Affairs is quite right in his assessment - that Russia and America, both possessing the atomic bomb for 20 years, have been able to refrain from becoming engaged in a major war. However, in the development of atomic armaments, mainland China has recently exploded an atomic bomb. Senator McKenna gave us the date.

Senator McKenna:

– On 16th October.

Senator SCOTT:

– On 16th October last.

Sitting suspended from 12.45 to 2.15 p.m.

Senator SCOTT:

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

Leave granted; debate adjourned.

page 133


Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Minister for Defence · Western Australia · LP

– I move -

That the Bill be now read a second time.

Mr. Deputy President, the purpose of this Bill is to establish a Housing Loans Insurance Corporation to insure lenders against losses arising out of the making of loans for housing. The Bill, which will authorize the Corporation to put into effect the Government’s promised housing loans insurance scheme, will empower the Corporation to insure loans made for the erection of homes, the purchase of existing homes, additions to homes, the repair and improvement of homes, and the discharge and refinancing of existing mortgages on homes. The main purpose of this scheme is to assist people to obtain, as a single loan and at a reasonable rate of interest, the money they need, and can afford to borrow, to buy or build a home. As the amount borrowed may, at times, be a high proportion of the value of a house and land, there is the risk that a lender may lose some of his capital or may not receive all the interest due to him. The offer by the Corporation to insure against the risk of loss due to failure to recover the amount outstanding of a loan, together with accrued interest, will enable lenders to protect themselves against such losses.

The scheme aims to assist people to borrow, by means of a single loan secured by a first mortgage, the difference between available personal savings and the cost of a home suited to their requirements. The amount of the loan would, of course, be related to the ability of the borrower to repay it over a reasonable period. It is our hope and intention that this scheme will progressively remove the present need for many credit-worthy borrowers to obtain a second mortgage loan, frequently on oppressive terms and conditions.

Sir, the scheme aims to assist people to obtain low-deposit loans to acquire homes by the offer to insure the repayment of loans made up to a high proportion of the valuation of a home. Insured loans may be 80 to 90 per cent, of valuation, or even 95 per cent, in cases where a borrower’s capacity to repay appears to be unusually high. However, to be insurable, loans must be made at reasonable rates of interest. A loan up to these percentages of valuation has in it far greater risks of loss than a conventional loan, of, say, 70 per cent, of value. Quite justifiably, up to the present, the major lenders, who are responsible for the safe investment of the moneys entrusted to them, have rarely been willing to lend where they see a possible risk of loss. Now that the risks will be removed when the loans are insured, we hope that the major institutions that lend for housing will be willing to make loans up to a high proportion of the value of a dwelling. ^

There are now close to three and a quarter million dwelling units in Australia. Over the past 30 years the number has doubled, and it is expected that it will double again within the next 25 to 30 years. The natural increase in our population must be adequately housed. In addition, dwelling accommodation must be found for the increasing number of newcomers to our shores, whose skills are essential to enable us to maintain our high rate of growth. If we are to continue to grow at about the samehigh rate as in the recent past, and I have no doubt we shall, we must encourage an increased rate of flow of the nation’s savings, especially private savings, into our home building industry. We expect the home savings grant scheme to assist in stimulating additional saving for this purpose. As time goes on increasing funds must be available to those who lend for housing purposes.

The provision of more funds for housing would be greatly assisted by the establishment in Australia of a market for housing mortgages. We hope that our offer to insure the repayment in full of housing loans will stimulate private enterprise to establish such a market. Moreover, in offering to insure these loans, we hope to attract additional overseas capital into the Australian home building industry. Our offer to insure the repayment of housing loans, together with accrued interest, will, we trust, go a long way towards achieving these important aims. The time will doubtless come when some lending institutions will be in a position to say that all their loans are insured by the Corporation, which is guaranteed by the Commonwealth Government. What safer investment could anyone wish for?

Before this Bill was introduced into another place, we made a close examination of other housing loans insurance schemes, the manner of their operation and the lessons to be learned from experience in administering them. We have also had the benefit of the valuable advice of an Assistant Director of the Central Mortgage and Housing Corporation of Canada, which has been operating a nation-wide housing loans insurance scheme for more than ten years.

As honorable senators would expect, we have also sought and obtained the views of the major lenders for housing on the elements of our proposed scheme. We have had the benefit of discussions with, amongst others, the Australian Bankers Association, the Life Offices Association, the Australian Association of Permanent Building Societies and the Australian Council of Co-operative Housing Societies. We are indeed grateful to them for the views they have expressed. We have also explored the difficulties being experienced by many home seekers in arranging to borrow the money they need for their homes. We have spoken to builders and housing project developers who will, we hope, be encouraged to expand their private enterprise activities with the assistance of insured loans. I believe we have evolved a workable scheme which will operate within the authority of the Bill now before the Senate.

This Bill has been drafted to give the Corporation the widest permissible powers to insure loans made for purposes in connection with housing. It is designed to empower the Corporation to insure all manner of loans that may be made to add to, or improve, the stock of dwelling accommodation in Australia. The Bill has also been broadly drafted because housing loans insurance is a field in which the Commonwealth has not had any experience to provide a guide, and in which problems that have not been foreseen may well arise. In essence, the Bill provides for the establishment of a Housing Loans Insurance Corporation, authorises it to carry on the business of insuring housing loans, sets out the general field in which the Corporation is to operate and indicates the nature of the limitations to which it is to be subject.

Loans acceptable for insurance will include those made, or being advanced, to the owner or lessee of land on which a dwelling: is being, or has been, erected. These loans will not be confined to those made in respect of a single dwelling unit. The Bill defines a dwelling-house to include not only a single dwelling and a home unit, but also a building comprising multiple dwelling units. Clause 4 defines insurable loans to include -

  1. loans made for the purpose of acquiring land and constructing, or completing the construction of, a dwelling on the land. However, clause 22 makes it quite clear that the Corporation may not insure a loan made solely for the acquisition of land - we do not wish to encourage the land speculator;
  2. loans made to construct a dwelling or complete the construction of a dwelling on land owned or leased by the borrower;
  3. loans made to purchase an existing dwelling;
  4. loans made to alter, improve or extend a dwelling. These would include loans for, amongst other things, the permanent provision of water supply, electricity and sewerage, and the conversion of an existing dwelling into two or more dwelling units;
  5. loans made to meet expenses on roads, kerbing or footpaths, in connection with land which the borrower owns; and
  6. loans made for the discharge of an existing mortgage over land on which a dwelling has been, or is being, erected and which is owned or leased by the borrower.

The legislation provides that the Corporation shall charge a premium for insuring a loan, and that the premium rates shall be determined by the Corporation. In fixing these rates, the Corporation will be required to aim over the long term neither to make a profit nor to incur a loss. It is expected that the premium to be charged will be in the form of a once-and-for-all payment for insuring a loan up to its maturity date. It is proposed that the premium be collected from the lender and that in practice the lender would recover the amount from the borrower. In return for the payment of a relatively small premium, the borrower will receive the benefit of a larger loan at a reasonable rate of interest and for a reasonable period. We expect it to be the normal procedure for the lender to agree to lend the amount of the premium to the borrower. When the lender does this, the amount of the premium may be added to the loan and the Corporation will insure repayment of the whole. It is not proposed that the Corporation be permitted to insure housing loans made by the Commonwealth or a State, or by an authority of the Commonwealth or a State, other than a bank. It is the usual practice of governments themselves to carry their own risks of loss.

May I draw the attention of honorable senators to clause 23 of the Bill. We believe this clause will be of very great significance in the future. It will authorise the Corporation to refuse to insure a loan if it is not satisfied that a dwellinghouse will be, or has been, built according to sound standards of construction. We all wish to see improve ments in the standard of housing in Australia, and the maximum feasible adoption of uniform standards that will increase the efficiency of the industry and reduce its costs. The Corporation should be in a position to assist acceptance of minimum building standards by having the power to refuse to insure loans for dwellings that fall short of reasonable standards of construction.

Loans will be insurable only if the repayment of the loan is secured by an approved security over the interest of the borrower in the land. The Bill defines an approved security as meaning a first legal mortgage, but it will also permit an approved security to be a second mortgage or, indeed, any form of security over the borrower’s interest in the landthat is declared by the regulations to be an approved security for a class of insurable loans.

It is the Government’s intention that a loan made for the purpose of buying or building a dwelling will be insurable only if it is secured by a first legal mortgage. This is in line with the objective of encouraging the major lenders to make high ratio insured loans, so that the need of many home seekers to obtain second mortgage loans may be removed. To insure a second mortgage made to acquire a home would be to insure lenders who lend mostly at interest rates higher than those at which first mortgage loans are customarily made, and for far shorter periods. Neitherthe American scheme, nor the Canadian scheme, authorises insurance of other than a first mortgage loan for the acquisition of a home. We also intend that an insurable loan for the discharge of an existing second mortgage must be a single loan, being either a renegotiated first mortgage or a loan to discharge the existing first and second mortgages, and that it would be secured by a first legal mortgage. We do not intend to authorise the Corporation to insure a renegotiated second mortgage loan secured by a new second mortgage.

The Corporation may insure a loan secured by a first mortgage made to a farmer for the erection of any type of dwelling on his property. As the Corporation will not be empowered to insure the repayment of a loan made to acquire land for farming and commercial purposes, the amount of an insurable loan made for farm housing will be determined in relation to the appraised value of the dwelling or dwellings proposed to be erected.

A loan to buy or build a dwelling to which is attached, for example, a shop or surgery, may be insured up to a percentage of the appraised value of that portion of the building comprising the dwelling. To be insurable, such a loan would have to be secured by a first mortgage. There are many people who wish to borrow to extend or improve their homes, but have already given a first mortgage over their properties. In these cases, it is not proposed to rule out the insurance of a home extension or a home improvement loan secured by a second mortgage, or some other type of security over the borrower’s interest in the land, but a first mortgage, including a renegotiated first mortgage, will be preferred.

The Bill defines the borrower’s interest in the land as an estate in fee simple, an interest as lessee under a lease in perpetuity from the Crown, or an interest under any other form of lease for a term of years. The Corporation would, however, have to be satisfied that the lease will give reasonable security of tenure to the lessee for at least the period over which the loan is due to be repaid. The Bill also authorises the Corporation to accept any other interest in land that may be prescribed by the regulations.

The Bill will establish a Corporation to carry on the business of insuring housing loans. The Corporation will consist of a Chairman, a Deputy Chairman and three other members. The Bill will also provide that the Chairman and Deputy Chairman be full-time members, and that the Chairman will also be Managing Director. The Managing Director will be the Corporation’s chief executive officer. This arrangement should provide for the efficient conduct of the Corporation’s business.

Clauses 17 and 18 of the Bill will give the Corporation power to carry on the business of insuring an approved lender who makes an insurable loan, against the whole, or against any part, of any loss in respect of the loan.

The loss that the Corporation may insure includes -

  1. loss of moneys constituting the loan, which may include the amount of the insurance premium:
  2. loss of interest and other charges on or in relation to the loan; and
  3. any other loss arising from any default in relation to the loan.

The reference to other charges associated with interest is to the management fees payable by some borrowers at regular intervals and assessed on the amount of a loan. These fees, which are charged separately under many building society mortgages, are similar to the charges for administration incorporated by most other lenders in the interest charge. Such a management fee will be treated as part of the interest charge.

The expression: “Any other loss arising from any default in relation to the loan “, is intended to cover losses due to realisation expenses, including legal costs in acquiring vacant possession of the property, costs of essential repairs to the property up to an amount previously approved by the Corporation, costs of the sale, including advertising costs up to a limit approved by the Corporation, and any payments by the lender of municipal rates and fire insurance premiums outstanding on the property. Our thinking is that the internal costs ordinarily met by a lender in administering an insured loan in default should continue to be met by the lender out of the charge for administration included in the interest payment or out of the management fee. There must obviously be a limit on the period during which interest may accrue on a loan in default and be admitted in the amount of a claim. This will be a matter for determination by the Corporation. When a loan is in default, interest might accrue at the mortgage interest rate on the outstanding balance for up to twelve months. Thereafter it might continue to accrue for a further period at a rate that might well be below the mortgage rate.

The legislation will provide that an insurable loan must be made by an approved lender. The classes of lenders eligible for approval will be specified by the Minister, but the Corporation will approve particular lenders. The Corporation will also have the power to withdraw its approval of a lender. Classes of approved lenders will include banks, life insurance companies and building societies. As time goes on other classes of lenders will almost certainly be approved. Approved lenders will, as far as possible, be responsible for the administration of insured loans. As is the practice of lenders at the present time, they will examine the title to the relevant property, appraise its value and assess the capacity of the borrower to repay a given loan. In the event of the default of a borrower, any action to renegotiate a loan or to obtain vacant possession and sell the property will, in almost every case, be undertaken by the approved lender. Under the default procedure, we have in mind that the lender will advise the Corporation of the action he proposes to take. It is expected that the Corporation will, in most cases, endorse the action proposed by the lender. If the Corporation does not agree with the proposed action, it will endeavour to persuade the lender to adopt the course the Corporation thinks desirable under the circumstances. The general practice will be that a lender shall exercise his rights under a mortgage to sell the property before he may submit a claim.

There may be cases where a borrower defaults under an insured loan and the mortgagee wishes to exercise his rights under the mortgage to sell the property and submit a claim, but the Corporation believes that a sale at the time would unduly increase the loss in respect of the loan. In cases such as these the Corporation will be permitted to determine the amount of loss in respect of the loan and to pay this amount, notwithstanding that the lender has not exercised any of the rights he has against the borrower. The approved security and any collateral to that security would, of course, be assigned to the Corporation. To deal with cases such as these, the Corporation will have a limited power to acquire, hold and dispose of the securities for loans insured under the scheme. It is a power the Corporation will, on occasions, need to exercise, but it may only be exercised when an insured loan is in default.

Clause 24 will authorize the Corporation to pay a claim where the lender has exercised his right to sell the mortgaged property, but has not pursued any personal or other remedies he may be entitled to exercise against the borrower. It is rare for the major lenders to exercise the rights they have under a personal covenant where the property has been sold. This is also the usual practice of overseas authorities who make and insure housing loans. It will, however, be for the Corporation to decide whether or not to accept and pay a claim if a lender has not exercised all the remedies he may pursue. Clause 19 of the Bill will authorize the Corporation, where a security is transferred to it in consequence of its paying a claim, to dispose of its rights under the security by a further assignment of the mortgage or, if it is satisfied that in all the circumstances it is desirable to do so, to renegotiate the security and, if it thinks fit, subsequently to sell it.

If a market in insured mortgage loans is to be developed in Australia, the insurance contracts must be assignable. Clause 42 of the Bill provides that when an insured loan is sold or otherwise assigned, the contract of insurance may also be assigned to the person to whom the mortgage is transferred. However, it will be essentia] to the smooth working of the scheme that an insured loan should continue to be administered by an approved lender. Such a lender will be familiar with the conditions attaching to the contract of insurance, the reporting to the Corporation of a loan in default, what may come to be regarded by the Corporation as reasonable action in the event of a default, the extent to which costs may be included in a claim and other administrative matters. The Bill therefore provides that a contract of insurance may be cancelled if an insured loan ceases to be administered by an approved lender. Before the insurance cover may be assigned to a non-approved lender, he must have arranged for an approved lender to administer the loan under an agency contract. Such a contract, which must be in a form approved by the Corporation, would list the things to be done by the approved lender. An agency contract will not, of course, interfere with the right of the holder to sell or otherwise transfer his interest in any mortgage to which such a contract refers. However, if a loan is to continue to be insured, it must be administered by an approved lender.

The Bill provides that a number of specified matters of policy may be determined from time to time by the Minister, by the Corporation with the concurrence of the Minister, or by regulation in accordance with a recommendation made to the Minister by the Corporation. The more important of these matters are referred to in clause 20 and sub-clause (2) of clause 47. I shall have something to say about them shortly. Clause 25 provides that, subject to the provisions of this Bill, the Corporation may adopt its own policies, but will be obliged to keep the Minister informed of any significant policy decision it may make. A matter of policy not otherwise provided for in the Bill may be declared by regulation to be a matter of policy in respect of which the Minister may issue a direction. The Bill, however, expressly forbids the Minister to instruct the Corporation to write, or not to write, a particular contract of insurance.

Sub-clause (1) of clause 20 of the Bill provides that classes of insurable loans may be prescribed by regulation. Sub-clause (2) of clause 47 provides, however, that after the Corporation has commenced to carry on its business, regulations prescribing classes of insurable loans, or an amendment of any existing regulations in respect of classes of insurable loans, may not be made unless the regulations are in accordance with a recommendation made to the Minister by the Corporation. Sub-clause (2) of clause 20 gives the Minister power to direct the Corporation not to insure particular classes of loans until he otherwise directs. This provision is included to give the Government a power to determine, if it so wishes, the scope of the business that the Corporation may insure from time to time. The Government may use this power in accordance with its assessment of the need to stimulate, or not, the levels of activity in sectors of the home building industry or to attempt to divert portion of the demand for homes towards a fuller utilization of existing houses. In times such as the present when the physical resources in the home building industry are close to being fully employed and building costs are tending to edge up, we would not wish the activities of the Corporation to create any undesirable pressures. However, honorable senators may be assured that the Corporation will be permitted to insure all classes of housing loans as soon as adequate finance and physical resources may be available for these purposes.

There will also be a limit on the amount of a loan that may be insured in respect of each class of insurable loan. These limits, which will be determined by the Corporation with the concurrence of the Minister, may be varied from time to time. The

Corporation will also fix limits on the percentage, or percentages, of the appraised value of the land and dwelling that may be lent and insured.

In announcing the scheme we said we would introduce legislation to permit the Corporation to insure housing loans up to a high percentage of valuation, ranging up to 95 per cent, in appropriate cases. We also referred to those who want a house which is, in size or quality, better than the average. At present the average value of a newly erected house and land is in the vicinity of £5,000. We do not intend to overlook those credit-worthy borrowers who wish to borrow a high proportion of the valuation of a house and land costing more than the average. There are, however, sound commercial reasons why those who wish to acquire such homes should have a reasonable equity in the property.

The Corporation will determine the maximum amount, and the maximum percentage of the value of a house and land, that may be borrowed if the loan is to be insured. No lender will be under any compulsion to make an insurable loan to any particular borrower, or to make a loan up to the maximum amount or the maximum percentage of valuation that may be insured. At present many institutional lenders have not the finance freely available to permit them to make many larger loans. Although we do expect all these lenders to make some larger high-ratio loans, and to insure them, the needs of many borrowers will continue to be satisfied with loans up to conventional percentages of valuation which will not <be insured.

Even if there were a large increase in the funds immediately available for housing, it is doubtful whether there would be an increase in the rate of home construction, as almost all the labour available for home building is now fully employed. In the first nine months of 1964 there was a most gratifying increase of 7,600 in the number of persons engaged in new dwelling construction. Whilst the Government is doing all it can to expand this labour supply, a further rapid increase must not be expected. It takes time to train craftsmen. Although a record number of building workers is migrating to Australia this year, there is a limit to the number we may attract. We will not, of course, relax our efforts to this end.

We must not expect the major lending institutions to change quickly the home lending rules they have been working to for many years. Experience elsewhere has been that, when an offer to insure high-ratio lowdeposit loans is first made, lenders hesitate to make larger loans. It takes time to change lending habits. A borrower seeking a highratio insured loan will be expected to demonstrate his need for it and his ability to repay it. Insurable loans made during the early operation of the scheme might be between 80 and 90 per cent, of valuation. This should help many who would otherwise seek both first and second mortgage loans. In the relatively few cases where a borrower’s capacity to repay appears unusually high, loans up to 95 per cent, of valuation may be made and insured.

Clause 20 of the Bill provides that a loan shall not be insurable if the interest rate payable exceeds the maximum permissible interest rate to be determined from time to time by the Corporation with the concurrence of the Minister. This rate will be notified in the “ Gazette “. It will be announced shortly before the Corporation commences to carry on its business, and should permit institutional lenders who make housing loans to insure some of their housing loans.

It is the practice of some lenders to take power under the mortgage to vary the rate of interest charged after a loan has been in existence for a specified number of years, or at certain set intervals. We believe it is highly desirable that the rate of interest payable on an insured housing loan should be constant for the full duration of the loan, especially if a market in insured mortgage loans is to be developed. It is not proposed that the Corporation should, in its initial operations, be required to refuse to insure mortgage loans where the interest rate may be varied. However, it is intended that the terms and conditions of contracts of insurance will include a provision that they may be cancelled if a lender were to vary the rate of interest on an insured loan without the consent of the Corporation or if the interest rate on an insured loan were to be raised above the maximum permissible interest rate prevailing at that time.

The Bill provides for the Corporation to determine the maximum duration of the loans it will insure. The maximum duration of an insurable ‘loan on an existing dwelling may be for a shorter period than for a loan for a newly erected dwelling. Home extension and home improvement loans will be for relatively short periods. When we announced this scheme, we said we would assist the obtaining of low deposit loans related to the income and reasonable creditworthiness of the borrower. The capacity of a borrower to repay a loan is a matter of importance. The Corporation may refuse to insure a loan if it thinks that the amount of principal and interest payable on the loan, and rates and any other payments in respect of the property, would exceed a certain, proportion of the borrower’s established income. Assuming this proportion were 25 per cent, of income, a loan repayable by regular instalments at intervals not longer than twelve months over a period of 25 years at an interest rate of, say, 6 per cent, per annum, would be about three times the borrower’s established annual income.

Honorable senators will note that the Bill contains the customary provisions in Commonwealth statutory authority legislation to authorise the Corporation to appoint staff. The Treasurer will make an initial advance of £100,000 and will be authorised to advance further sums to the Corporation on such terms and conditions as he determines. The Corporation will also have a general borrowing power to meet its possible future need for funds, but this power may only be exercised with the Treasurer’s approval. The Corporation’s avenues of investment will be limited to fixed deposits with an approved bank, Commonwealth securities and the official short-term money market.

The Bill will exempt the Corporation from taxation under a law of a State or a Territory and also from the payment of income tax. The Corporation will, however, be empowered to pay for municipal services in respect of properties it may hold. Assuming that adequate funds are forthcoming the passage of this Bill and the establishment of the Corporation should eventually confer widespread benefits on many people. The scheme is designed to assist many of those wishing to borrow, to buy or build their own homes, to obtain high ratio insured loans at reasonable rates of interest. Those who wish to borrow to add to their homes may benefit from insured loans. Those who lend for housing purposes also stand to benefit greatly. The risks of loss of capital and interest will be removed when their loans are insured.

Benefits should also flow to those who have the enterprise to borrow to build multiple dwelling units, or to sub-divide land and erect a number of individual homes. Indeed, the scheme should benefit all who obtain their livelihood from the home building industry. In the past those who build our homes have suffered from fluctuations in the demand for their services. In their interest and in the national interest, it is most desirable that these fluctuations be reduced to the minimum. Although home building is a field in which the Commonwealth has only limited powers of determination, our policy is to do all we can to influence the determining factors, sothat Australia will continue to have a high and rising rate of new home construction. The housing loans insurance scheme, to operate under the authority of this Bill, should help us to achieve this most important aim.

I commend the Bill to honorable senators.

Debate (on motion by Senator Bishop) adjourned.

page 140


Ministerial Statement

Debate resumed (vide page 133).

Senator SCOTT:
Western Australia

– Prior to the suspension of the sitting I was mentioning that the spheres of danger have moved from the North Atlantic area to the South Pacific area, and that as Australia is a part of that area we, as a nation must decide on certain policies and on ways and means of continuing to live, we hope peacefully, in it. We have to decide who are our friends and who are our enemies. Last October, the Communist Chinese exploded an atomic device and no doubt that was the first of many. Control of nuclear weapons and atomic energy is rapidly passing from the hands of two nations. Now that the French have exploded a nuclear device, at least four nations have this capacity and the last to achieve it was Communist China.

In the eyes of the world, Communist China is the one nation that can provoke a major war. By its action throughout the world, China has shown that it is not a peaceful nation but an aggressive nation. China showed this first by her attack on and conquest of Tibet. Later she overran the borders of India to a depth of 100 miles in places. In addition to this, we find that the ideologies of the two main Communist countries are not running parallel. One reason for this was the decision by Communist China in the last few years to inform Soviet Russia that she required the return of some territories that are now held by Russia. China claims that she is entitled to certain of these areas under agreements dating back as far as 1850 and 1858.

Formerly, Soviet Russia sympathised with Communist China to such an extent that in 1958-59 Russia gave military aid to China including technical assistance for the construction of military equipment and atomic power stations. Following a private disagreement which was not publicised, Russia decided suddenly to withdraw her support from Communist China. She took away some thousands of technicians who were then stationed in China. This split has grown. One of the main reasons is that Soviet Russia believes she can live peaceably with the rest of the world and probably win ideologically over a number of years without an all-out war.

It will be readily agreed that if there is a major war between Soviet Russia and the United States of America or the Western world, the war will not be fought with conventional weapons. That is why Russia and the United States of America, the two greatest nations in the world, have learned to live peaceably side by side over the past few years. Both of them have nuclear weapons and both realise full well that a major war would mean the end of civilisation as they know it for at least 500 or 600 years. But what has Communist China said about a total war? Her leaders are reported to have said that if China had to fight a war with any other major nation and lost half her population, she would still have more people than any Western power.

So the danger is evident. As a nation we must decide who are our friends and, having made that decision, we must do our utmost to see that they are kept free. Communist China has revoked the Geneva Agreement of 1954 by helping to equip North Vietnam with armaments so that the North Vietnamese can infiltrate South Vietnam and conquer it. Under the Geneva Agreement of 1954 it was decided that all people living in Vietnam north of the 17th parallel could be controlled by a Communist Government but all those living below the 17th parallel would be at liberty to choose their own form of government. North and South Vietnam were to live as separate countries. The Agreement has been violated and this is clearly stated in the statement by the Minister for External Affairs (Mr. Hasluck). In this connection, the Minister stated -

It is nearly three years since the International Control Commission in Vietnam condemned the violation by North Vietnam of the 1954 Geneva Agreements by the despatch of arms and men from the North and the incitement and encouragement of hostilities in the South. The rate of infiltration from North to South increased until in 1964 it is estimated that 10,000 Vietcong terrorists trained and armed by the North were sent to the South.

These men, trained and equipped as terrorists, are in South Vietnam now. This is not an easy problem. These people are being equipped and trained by Communist China and are infiltrating South Vietnam, lt is all very well to say that we want the Western powers, including the United States of America and some of our own people, to leave South Vietnam to govern itself. That is a quite easy statement to make, but let us look closely at it. What are we to do with the Vietcong now estimated to be in the vicinity of 30,000 or 40,000 in South Vietnam? What is to be done with the Communist Chinese who are there to assist the Vietcong? The problem is not actually solved if the Western powers agree to withdraw from South Vietnam. That statement can be proved by reference to history. Under the Geneva Conference Agreement, it was arranged that the Communist Pathet Lao would withdraw from Laos provided the Americans did likewise. The Americans honoured the terms of the arrangement, but the Communists stayed there and are still infiltrating in Laos.

Suppose the Western powers said: “All right, for the sake of peace we will let the South Vietnamese decide what they are going to do. We will leave them to the mercy of the Communist influence of North Vietnam and China.” What would happen? Those people would be overrun. They would not be able to make a decision of their own. The Western world would lose one of its pillars because never let it be said that once we got out of South Vietnam and did not help our friends there that would be the end of this campaign. The Chinese have claimed to have, and no doubt they have, an overall plan which I hope to be able to expound to the Senate in the time available to me. Once we got out of South Vietnam and left it to the Communists, what do you think would happen to Cambodia and Thailand? If the statement in the “Sydney Morning Herald “ of yesterday’s date is correct, there is infiltration by the Communists in at least 12 areas of South Vietnam. The newspapers and radio in Peking and Hanoi are emphasising, and using propaganda to increase, the Communist activities in those provinces. So, we would have to fight there. Then, what would we do? We might say: “ All right, we will get out. We will not help these people. We will leave them to their own devices and let the Communist Chinese take control.” Having left South Vietnam, we would find that Laos would go and Cambodia and Thailand would fall We have seen what is happening in the southern areas in Malaysia. It would not be very long before Australia was left isolated in the South Pacific to defend itself with the aid, no doubt, of its Western friends.

I believe that while there is hope in respect of looking after our friends in these areas, we should help them because they represent the pillars of free democracy. That is why the Australian Government has sent technicians to South Vietnam. That is why the United States of America has an armed force there. That is why different areas in North Vietnam are the scene of fighting and bombing to stop the Communists bringing down men and equipment from North Vietnam to fight in South Vietnam.

The Leader of the Opposition (Senator McKenna) commenced his speech this morning by saying that he remembered the debate on the incident in the Gulf of Tonkin. In that incident, an American destroyer patrolling in international waters was attacked by North Vietnamese torpedo boats. This incident occurred, if I remember correctly, in August last year. An order was given by the American Administration that assistance should be given and another destroyer was sent to accompany the destroyer mat had been attacked. Those destroyers were to be escorted by an aircraft carrier. A few days later, the destroyers were attacked by torpedo boats, and they fired back. Some of the torpedo boats were destroyed and the aircraft carrier used its air power to attack the bases from which these torpedo boats had launched their attack on the American destroyers.

This, I believe, was one of the first incidents of major importance in .this area. America and Australia said that they intended to help the people of the area to look after themselves. How can a nation protect itself from the onslaught of a neighbouring country unless it is permitted to hit back at the bases from which the attacks are coming? America, which has been helping the South Vietnamese to defend themselves against the Vietcong for quite a period, has decided that it cannot successfully carry on this type of warfare or give this type of protection unless it can destroy the lines of communication and the bases from which these attacks from North Vietnam come. :So, the Americans are sending their aircraft to destroy these bases.

Honorable senators heard the Leader of the Opposition mention the latest developments including the dropping of a nausea bomb. My only explanation of this action can be that this bomb, termed as the beginning of gas warfare, creates a feeling of nausea in the people among whom it is exploded. That is where it gets its name. This type of bomb is used by governments in many friendly countries, which are not at war, to stop riots in their communities. In this instance, the bomb was used, we are informed, by the South Vietnamese Air Force. It was used because of the great difficulty of discerning the North Vietnamese from other people. Because an attack using conventional weapons or bombs would kill as many of their own friends as the enemy, the South Vietnamese decided that they would use this bomb to disperse a certain type of raid that was happening in this area; We have learned with interest of an announcement by Mr. Dean Rusk that it is not the intention of America to use lethal gas in Vietnam. So we have that statement with which to console ourselves. If we let one of these countries of South East Asia go, before very long we will be left isolated in this area.

I mentioned earlier, Madam Acting Deputy President, that the present conflict in South East Asia was the result of a move by the Communist Chinese to gain control of the whole of this area. If the Western powers are driven out of South Vietnam, the attack will go on. Just to the north of us we see what is probably the beginning of an overall plan. I refer to events in Malaysia, which wants to live at peace with its neighbours but which is being subjected to confrontation by the Indonesians. Every few days we hear of landings by the Indonesians in Malaysia, and of people being killed. I am disturbed by the fact that the P.K.I., the Communist Party in Indonesia, which eight or ten years ago was disrupted by the Indonesian Army, has increased in strength under Sukarno’s administration from 8,000 to more than 3 million, with further contacts totalling 13 million in popular front movements.

Senator Ridley:

– Who is the honorable senator’s authority?

Senator SCOTT:

– The honorable senator has only to read the relevant publications to ascertain that what I have said is correct. I have read about this in several articles and have made a study of it; but if the honorable senator asks me who has made these statements I am afraid that I cannot tell him. I mention that fact as an illustration of the direction in which the Indonesians are going. That state of affairs worries me, and I have no doubt that it worries all honorable senators opposite. It was mentioned by the Leader of the Opposition as being something which called for thought on our part; I believe it is troubling him, too. The P.K.I, is reported to be under the control of Sukarno. He believes that by pursuing his policy of Nasakom he can keep the Communists under. But we have read recently a Press report that some of the leading Indonesian right-wingers are changing their politics. That worries me, and no doubt it worries us all as a nation, because we had thought that the Indonesian Army, for instance, could have kept the situation under control. I have been informed that the P.K.I, now has some say in the Indonesian Army.

From day to day we observe a movement by Indonesia away from the West and towards the East. Sukarno and Indonesia as a whole seem to be turning to the Communist Chinese for their support. In the past the Indonesians have obtained assistance from the Western powers in the form of military and naval equipment. Despite the fact that they have said that they are getting some assistance from Russia, I believe they are leaning further towards the Communist Chinese for assistance militarily and ideologically. That is very bad. We have been told that Sukarno is ill. We as a nation have tried to live peacefully with him. We want to live peacefully beside Indonesia, but I do not know how we can do so when Malaysia is being subjected to infiltration and landings by Indonesians. We were reminded as recently as today by the Leader of the Opposition that one of our own sergeants had been killed and two privates had been wounded as a result of Indonesian action. This is of grave concern to me.

In a leading article in today’s “Sydney Morning Herald “ it is stated that Australia should not be giving any economic assistance, be it in the form of technical assistance or otherwise, to Indonesia. That statement, which doubtless was made by a responsible person, probably has given rise to a lot of thought on the part of the average Australian reader. We should not give up hope of being able to remain on friendly terms with Indonesia. We must do what we can to preserve peace. We have told Indonesia that we want nothing more than to be able to live in peaceful co-existence with her, provided she is prepared to let Malaysia alone. We have joined with other nations in endeavouring to bring the Tunku and Sukarno together with a view to their arriving at a peaceful settlement of the present dispute. As yet we have not been successful. Indonesia’s economy is in a very bad state. Political excitement over Indonesia’s relationship with Malaysia is kept boiling so that the thoughts of the Indonesians will be turned away from their own economic problems. We do not know how long this situation will last. We know that Indonesia is the fifth largest nation in the world potentially but has not exploited its riches. With other nations, we are prepared to give Indonesia economic and technical assistance if we are called upon to do so, and provided that Indonesia is prepared to recognise Malaysia.

It is my belief that the Communist movement has a plan which commences with the conquest of South Vietnam to be followed by Cambodia, Laos, Thailand and Burma and aims then to provide further aid to Indonesia in its confrontation policy against Malaysia. If the plan of conquest is successful that far - if it is allowed to go that far - what then of West Irian, as it is now called by the Indonesians, and which we call West New Guinea? Would not this be the next country to be taken, whence they would launch an attack against East New Guinea? Having gone into East New Guinea, if allowed - or into East Irian, as the Indonesians call it - what would happen to Australia and to the Philippines, north of Australia?

If newspaper reports are correct the Filipinos are worried today by the expansionist policy of Indonesia. They believe the Philippines could be overrrun and they are asking America to set up naval bases for their protection. It seems to me that the pattern is quite clear. As a nation we must remain as one of the pillars of freedom in this area. We must give military support to the other nations which are pillars of freedom in this region and are fighting Communists. I believe that by so doing we will remain a free country, but if we allow the countries of South East Asia to be overrun, we will be the next country to be taken into consideration by the Communists in their programme of world conquest.

South Australia

– I endorse the remarks made by the Leader of the Opposition in the Senate (Senator McKenna) and commence where he concluded by quoting the remarks of the Leader of the Opposition (Mr. Calwell). Senator McKenna affirmed that we as members of the Opposition, are as concerned as anyone on the Government benches at the spread of Communism. How-, ever, we seem to differ as to the best method of combating the spread of Communism. We are concerned that the proposals of the Government do not seem to us to offer a solution to the spread of Communism throughout Asia.

History has shown that force increases the risk of the spread of Communism. It would appear that the answer is not to be found in the use of force. If I understood Senator Scott correctly, he said that we must fight the Communists in South East Asia. This would place us in a position where we might become further entangled and might do harm to the cause in which both sides of the House believe. In the First World War the great Lenin, leader of one of the smallest political parties in Russia, was in exile. He came to power in Russia only when the Russian workers were armed and a situation was created in which Communism could breed and thrive. Three years of combined military intervention by most world powers consolidated the Communist domination of Russia from 1917 onwards. In places where the world was previously free of Communist influence, the growth of Communism appeared as a result of a world war. It is doubtful whether the spread of Communism would ever have been achieved had the world war not occurred.

Senator Dittmer:

– lt was oppression. It was more than a world war.


– 1 agree with Senator Dittmer that there were other contributing factors. I am putting forward the proposition that poverty and misery provide a breeding ground for Communism and the use of force creates a situation in which Communism can spread and achieve success. A small army of Communists for many years operated without a great deal of success in Mongolia. Upon the Japanese invasion of China these Mongolian Communists were supplied with munitions and spread rapidly throughout China. With the outbreak of the Second World War and the desertion of the Japanese to other fields, another great slice of the earth’s surface came under the domination of the Communist influence. Possibly the poverty of the peasant population of China aided Communism to thrive but the final achievement of power in China was made possible by the outbreak of hostilities and because the means of destruction were placed in the hands of the Communist forces.

Because of the Second World War, great areas in Europe were lost to Communism and are today under Communist domination. I do not think anyone would dare say that the group in South Vietnam which we call the Vietcong is not stronger today and does not have more support from the population than it had at the time of American intervention in South Vietnam. The Vietcong has greater support today from the people, despite the period of American intervention, than it had at the time of America’s entry to South Vietnam. The United States now proposes to extend the war and further create the conditions that assist to spread the Communist influence throughout the area. U Thant recently requested a conference and said that until the American intervention in South Vietnam, the Vietcong was left to its own resources and had nothing else until America’s entry supplied them with American weapons and arms. I think that is readily recognised. When we last debated this subject in the Senate I brought the evidence of no less a person than Mr. McNamara, Secretary of Defence of the United States, and political adviser of General Taylor in Saigon, that there was no evidence of any large scale infiltration from North Vietnam into South Vietnam at that time.

Senator Cormack:

– What about Laos?


– We are talking of Vietnam at present. Some sources stated that the weapons being used then were either home made or of American manufacture. We do not deny now, and we did not deny then, that there was some activity by North Vietnam. In fact, the report of the United Nations committee of investigation shows that North Vietnam was in breach of the treaty terms, just as America was in breach of those terms by having certain airfields in South Vietnam. What I am trying to say is that history teaches us that force is not a solution to the problem of the threat of Communism. If our only solution is the use of force, we are doing a disservice to the cause in which the parties on both sides of this Parliament believe.

Some people argue that if the war in Vietnam were to spread, both China and Russia would then support the Communists in Vietnam. Of course they would. Both these countries have an ideology - whether it is good or bad - that is based on Communist world domination. They know that Communism thrives in a situation of warfare and therefore would be prepared to keep the war in Vietnam going because that would be in the interests of their ideology. It is only realistic to acknowledge that China would send supplies to Vietnam and keep the war there going. Before the recent attacks on North Vietnam, the hostilities were a matter of American troops and armaments being used against an unknown enemy. The war in Vietnam is a war in which you do not know whom you are firing at and in which you cannot trust even the man you are talking to. Last year, after touring this area, Senator Mattner issued a statement to the Adelaide “News”. He said: “This is a most peculiar war. There is no front line. You are speaking to Government officials and at the same time listening to Communist broadcasts over loud-speakers. You do not know whether the man next to you has a bomb in his pocket that he will drop at your feet.” Today America realises that there is no use in fighting a force that she cannot find or see and, contrary to what was thought prior to the American Presidential election, there is a desire to spread the war to North Vietnam, despite the possibility of Chinese intervention. Senator Scott spoke of the possible effects if events developed into a nuclear war. If a nuclear war occurred and half the population of each nation were slaughtered, China would emerge with a bigger population than the rest of the world. China would not be defeated in such a war, but nuclear warfare would only increase misery, suffering and the other things in which Communism breeds.

I want to look now at the ideological aspects of this problem, because not only are we losing the actual war in Vietnam but also we are apparently losing the propaganda war there and in the rest of Asia. Honorable senators will remember that the document we are discussing states that China has not used force or indulged in aggression against any countries other than Tibet and India, although there is not much mention of that latter country. The statement goes on to tell of Chinese propaganda in the various countries of Asia - propaganda that speaks of the necessity for liberation and of the need for an uprising of the Asian peoples to overthrow their exploiters. China is spreading such propaganda, but anyone who knows the American propaganda machines will realise that America is also spreading propaganda about the American way of life and the need to preserve the existing ways of life of the inhabitants of countries in which it is interested. However, it is apparent from the growth of Communist power throughout Asia and the growth of the Communist parties there that we are losing even the war of propaganda. All parties in this House agree that the Communist ideology is not good, but that view may not be shared by suffering and hungry Asians living under bad conditions. The Communists make an appeal to them and we make a counter appeal. We say they will be better off under a system that gives them the right to elect their governments and so on. That is something that men have fought for throughout history, but what does freedom mean to a hungry or a starving man, a man with empty pockets, with a bare table and with children in rags? He would grasp at anything other than a system that reduces him to that state. The solution to this problem is not in guns but in butter.

Let me develop this theme further and try to impress upon the Senate what we are up against in this fight. In the history of mankind we have seen revolts against authority and a desire to progress. I am inclined to think that the incident in the Garden of Eden was a revolt against authority, against the direction that the apple was not to be eaten. There has always been a desire amongst men to better their conditions and to this end they have adopted various religions, the idea being to instil into men’s hearts and souls that they should try to establish God’s kingdom on earth, with justice, equality and fraternity. However, the promise of salvation or the threat of damnation has not been sufficient to make the Utopia that it was thought religion would make. In later times, Socialist movements came into being and, by parliamentary action or legislation, tried to bring about a more equitable distribution of the world’s wealth. Possibly we could trace the history of Socialism back to the Industrial Revolution in England. Probably Robert Owen would be the first recognised Socialist.

The Industrial Revolution in England showed up markedly the disproportion in the distribution of wealth, because in those times some lived in great poverty while others gained much from the introduction of machinery. Since Robert Owen there have been many Socialists. Socialism spread from country to country as industrial revolutions occurred. Socialism even developed in agricultural countries. Then came one Socialist - I refer to Karl Marx - who developed a theory differing from the orthodox Socialist theory. He developed the idea of the dictatorship of the proletariat. That idea is the vital difference between the Communist Party and the parties similar to the Labour Party in Australia operating throughout the world. This brought about the division in the two sections of Socialist thought.

Over the years the Socialists who remained Socialists have captured representation in most of the Parliaments throughout the world, without doing any injustice. People who followed the revolutionary line have never been a threat in the English speaking world. The reason for this is that in the English speaking world we have not experienced the conditions upon which revolution breeds. To my knowledge, the only time when they have gained representation in Parliaments of the English speaking world was during the war period when we saw the success of Gallacher from Scotland in the House of Commons and Paterson in the Queensland State Parliament. The period of the growth of Communism in the English speaking world was during the greatest war in our history. That is why we say to those Red baiters in the Parliament who from time to time try to create the Communist bogy in Australia, that they are fighting a bogy which is not a danger to the English speaking nations. While we can maintain our affluent society and our standard of living, Communism is not a threat in the English speaking nations.

Senator Cormack:

– Why are they here?


– Because the Communist Party is an international organisation that has some following in every country in the world. But the honorable senator does not sleep uncomfortably in bis bed at night because he thinks that tomorrow the Communists may become such a revolutionary force that he will be out of a job and the dictatorship of the proletariat will be in power.

The same position does not apply when we look at the situation in the Asian countries. Last year I had the privilege of visiting India, Pakistan and Ceylon. I visited Karachi, to Which Senator Wright referred last night when he was dealing with the Indus Basin legislation. There are in Karachi 100,000 people without homes. They sleep on the footpaths at night, or if it is too cold at night they sleep there during the day. There are millions of people without jobs in the area. There are millions of people who live along the river banks in humpies and bag ‘huts. They have no jobs and receive no unemployment benefits; yet they have the responsibility of maintaining a family. They have the same emotions as we have. They bring children into the world and give them love and affection but they cannot look after them properly. Surely they are seeking a solution of the dilemma in which they find themselves. What can appeal to them more than something which is entirely different from the system that has reduced them to their present state? That is why Communism is spreading throughout Asia. Those are the conditions in which Communism breeds.

Then there is the Marxist theory of the vanguard of the Communist Party. Unlike the Socialists, the Communists do not have to wait until they influence the people md get into power. They need only a small minority of people as a vanguard to lead the workers in their class struggle. We put guns around them and think of better weapons with which to fight them. We create tortures and methods of destruction that breed hatred against the outside influence that enters the country. We are trying to stop the spread of Communism by the very methods that have placed half the world’s surface under Communism:. I appeal to the Government, as did Senator McKenna, to find another solution of the problem and to see whether it is possible to call a conference of the various countries in an effort to solve it.

It is useless to tell the people that America will give them freedom and security, and that the Western powers will provide for their needs under the Colombo Plan. Last night the Senate passed legislation concerning a dam in the Indus Basin which will not increase the wealth of India one iota or feed more people. It is a large project but it is one of the small insignificant things in the history of the country. Perhaps it will help to ensure a better relationship with Pakistan than any other action which we have taken. Whilst I found that the Pakistan authorities were very appreciative of the assistance they have received under the Colombo Plan, including assistance from Australia, they were very hostile to the assistance given to India by Australia for re-armament as they considered India a potential enemy.

All that these people want is security, the right to live and the right to bring up their children like any other human beings. They have suspicions about outside influence. If a foreign nation tries to impress them with its kindness by holding guns at their heads and by throwing gas bombs, that does not reassure the inhabitants that the foreign nation is friendly and will be their salvation. On the subject of the bombs, I want to say that I am indebted to Senator Ridley for drawing my attention to an article in the “ Age “ of 25th March 1965, which states

Six republican Congressmen have called on President Johnson to end the use of gas in South Vietnam.

They sent a letter to him saying that gas warfare “regardless of its intensity is so abhorrent to all peoples that its introduction inevitably will help turn world public opinion against the United States “.

They said the use of the gas might encourage North Vietnam to fight on instead of bringing Hanoi’s “ aggression “ to a halt.

We have to try to win the confidence of the people, but history has shown that we cannot do it by the use of bombs. We are creating the very conditions that will spread the influence which we are most determined to destroy.

There are many matters that need to be considered. We must consider the question of Malaysia. The Australian Labour Party is in full agreement with the Government that we must have troops stationed in Malaysia. We supported the formation of Malaysia. We think our forces should be there in accordance with a reciprocal agreement; but they are there. It has been said that if we lose Vietnam, Communism will spread to Thailand, Laos and to other countries. I say that whether or not we lose Vietnam, if we do not do something to rectify the position in South East Asia, Communism will spread. Some governments are kept in power today only by an appeal to the national pride of their citizens. I am convinced that many governments do not want a state of security. I think there would be a revolt in some eastern countries today if there was not play upon the pride of the people. The people of India are told that Pakistan is trying to take Kashmir away from them and that they must build up defence forces. The Pakistanis think that they are better than the Indians. The Indians, think that they are better than the Pakistanis. Sukarno can well make a plea to the Indonesians to forget their economic position because of some alleged threat. Now it is the threat of encirclement. When Sukarno took power he had one policy - to obtain East New Guinea for Indonesia - and the people of Indonesia gathered round him and rallied to the cause. He achieved that objective, and he achieved it very easily.

Senator Wright:

– The honorable senator does not mean East New Guinea?


– Irian.

Senator Cormack:

– He means East New Guinea. That is what Sukarno said in 1941.

Senator Wright:

Senator Cavanagh did not mean that.


– I did not mean that. Having secured it with very little discomfort, he had to find another distraction, rather than have the Indonesians look at the economic position. We are faced with the fact that there are big Communist elements in Indonesia today. It may be that if Sukarno had not a policy of confrontation towards Malaysia realisation by the people of the economic position would strengthen the forces of Communism of which we are so much afraid beyond the northern shores of Australia. It may transpire that if Sukarno is defeated on this issue that seems to create national pride centring on him as a hero, the population will turn to the big Communist elements in the area.

This is not a problem easy of determination. Surely there could be some greater power just to handle the whole question of defence and the development of the world, with perhaps a redistribution of some areas to settle border disputes. After the war of 1914-18 the world put some faith in a world government - the League of Nations - and after the war of 1939-45 people put some faith in another world government - the United Nations. The Minister for External Affairs (Mr. Hasluck), in the speech that we are discussing today, asked: “Who would rely on the United Nations for defence?” Obviously, it is possible that we would be let down if our only reliance for the defence of Australia or any other country were on the United Nations. But we cannot rely on any single country outside the United Nations, because that country’s assistance may not be available at the time of invasion, or that country may not be willing to come to our defence at the time of invasion. Unless machinery is created to give the world more confidence in the general defence setup in future the nations are failing in their duty. While one could not have complete faith in the United

Nations at the present time, our every aim and effort should be for the strengthening of the United Nations and for continual representations through the United Nations to try to settle problems and disputes as they occur from time to time. If, by a series of such settlements or a series of beneficial results from the influence of the United Nations an organisation were established that was recognised as a sufficient peacekeeping force, the risk of international incidents would be reduced and defences could be reduced commensurately.

The speech that we are discussing alarms me. The Minister stated-

We have to make judgments from time to time on what is right as well as on what will keep us safe, lt seems likely that the world will become more and more unsafe for us in the coming years.

The main consideration there is with what will keep us safe. I do not know what the position is to be when there is a conflict between what is right and what will keep us safe. This can happen when another world power decides these issues. The Minister also stated -

For us, neutralism is not a practical choice, We Australians must chose our side because in the immediate future we are determined to ensure the defence and the survival of our country and we want to preserve our right and our capacity to apply our own faith and ideals regarding human society in Australia.

Looking at chose two paragraphs, I think that the Minister takes the attitude that we cannot put sufficient faith in the United Nations and that we have to line up with the big powers, right or wrong. This brings me to a very pertinent point. On Tuesday, I asked the Leader of the Government in the Senate (Senator Paltridge) a question about the use of phosphorus bombs by the United States of America in Vietnam. I accept that the Government does not know whether phosphorus bombs have been used by America in South Vietnam or whether any gas bombs other than tear gas bombs have been used. On Tuesday, we were relying on newspaper reports that a phosphorus bomb, which burnt the skin on exposure to air - a burning which could be stopped only by immersing the skin in oil - had been used against North Vietnam. The Minister replied to my question by saying that he did not know whether this was so, that we were relying on newspaper reports, and that he had received no official reports. On the same subject, Senator Murphy put this question to the Minister -

Whatever has happened in the past, will the Government see that in future Australia is not associated or identified in any way with war against children or with the use of phosphorus bombs or poison gas in Vietnam.

Senator Cormack:

– A smoke bomb has phosphorus in it to ignite the smoke.


– That is the point that I am coming to. We were not saying what had been used in Vietnam. Our questions arose from a newspaper report. Senator Murphy asked whether, whatever had happened in the past, the Government would see that Australia was not associated or identified in any way with war against children. Would one not think that the Government could come out and say: “We will not be identified with war against children “? I am sure that if the Australian Government - much as we condemn it - had a choice, it would not be identified with war against children. Senator Murphy added: “ Or with the use of phosphorus bombs “, - bad as we thought on Tuesday they were. Again, I should think that the Australian Government would give that assurance. He then went on to refer to the use of poison gas and asked whether the Government would give an assurance that it would not associate or identify itself with the use of poison gas? Senator Paltridge concluded his reply to the question by stating -

I am unable to give the honorable senator the assurance which he seeks.

Our international transactions have today placed us in the situation that, in the absence of a world body which, could give us protection, we must align ourselves with a national power which can give us the protection we need. But if America, the nation to which we look for protection, wants to engage in South Vietnam in a war against children and wants to use phosphorus bombs and poison gas cannot the Australian Government give an assurance that we will not identify ourselves with America’s actions? We must realise that no matter what horrors may result from die war in South Vietnam, we are compelled to endorse and condone them. Surely our foreign policy has sunk to a very low level if we have reached the stage at which we have no say in the kind of war that will be waged. 1 appeal to me Government to say to America: “We are supporting your campaign in Vietnam but, although we do not accuse you of doing what the newspapers say you are doing there, we want you to know that we will not support any inhuman methods of warfare if you contemplate using them in the future “. Is that too much to ask the Australian Government to do? That is what Senator Murphy yesterday asked the Australian Government to do, but he was told by the Leader of the Government in this place that no such assurance could be given.

Senator Cormack:

– Because the Government is not accepting the honorable senator’s facts.


Senator Cormack does not understand. There is no question of facts. There is no accusation that America did the things that the newspapers accused her of doing. Irrespective of what has happened, we have asked the Government to give an assurance that Australia will not be identified with a war against children, should that occur. To that, the Leader of the Government in the Senate replied that he was unable to give that assurance. We have looked for the reason why we have become so callous and so unconcerned about the welfare of children that we allow the use of poison gas, and we have found that this is all wrapped up in the Government’s foreign policy, which requires us to align ourselves with a strong power, no matter what methods that power may use in war. That is where we stand at present.

According to the Minister’s statement yesterday, America admits using some form of riot control gas. It is referred to as tear gas. America claims that this does not kill but leaves people who come in contact with it unconscious for about an hour, after which time they recover completely. Surely babies in prams who are fighting for their very existence so soon after birth, and little kiddies, should not be exposed even to tear gas. But that is the stage which the war has reached. If it were claimed that the use of this gas was designed to end the war quickly, just as attempts were made to justify the use of the atomic bomb on Hiroshima, there might be some justification for America’s action, but everything points to the fact that we are not succeeding in the invasion of North Vietnam so other methods of waging war must be considered.

For too long has the Australian Government been relying on America to come to our aid if we are attacked. If at the time of an attack we were not on friendly terms with America or if America were otherwise engaged elsewhere and could not help us, we would have no-one to come to our assistance. Because we would have tied ourselves up heart and soul with American policy - right or wrong - and would not have displayed any initiative in the settlement of matters in dispute, we would not have the respect of other nations. Surely it is time we used some initiative and developed a foreign policy of our own. Surely it is time that we displayed some degree of leadership and led representations to bring together the warring factions in the world in an endeavour to settle their differences. Occasionally we would have some success, and in addition we would be building up a reputation of our own among the nations of the world which would make them proud to defend us if the need ever arose.

I hope that I have contributed something of value to this debate. I do not want to criticise to the extent of saying that the Government is always wrong or, to use a phrase, “ Yankee, go home “. I think I have shown the futility of the action that we are taking. For God’s sake, if we are sincere in saying that there is a threat of invasion of Australia as a result of the spread of Communism, let us do something which will effectively stop the spread of Communism, and not be content to shoot our principles down people’s throats.

Senator LAUGHT:
South Australia

– Like Senator Scott, I congratulate the Minister for External Affairs (Mr. Hasluck) on the most interesting paper that he has caused to be delivered to the Senate. It does the Government proud to have presented to the Parliament a paper of such a high philosophical tone, showing the results of an exhaustive examination of conditions existing in the world today.

Senator Cavanagh gave quite an interesting discourse of the philosophy of Communism, Socialism and Marxism. The report of his speech will be a valuable record for us to look back upon in the future to learn the ideas permeating his mind. However, he did not bring forward any practical solutions to the problems which exist in the Asian world in which we find ourselves. I thought that the Minister’s examination and analysis of the situation, even though couched in broad philosophical terms, gave practical illustrations of where Australia’s policy was leading and where Australia hoped to do great good.

Senator Cavanagh, for instance dismissed the work of the Colombo Plan by saying that the Indus Basin project is a relatively small thing and does not amount to much. He dismissed Australia’s efforts under the Colombo Plan and through the United Nations agencies with a few remarks. I do not think he did the Australian people justice in his reference to the good that the Colombo Plan is doing to the Asians who are sent to Australia and by the material aid that we send to the Asian region. I think, therefore, that Senator Cavanagh’s contribution, interesting and penetrating as it was, did not advance the Senate’s thinking and did not take us any closer to a solution to this problem. I hasten to repair some of the omissions of Senator Cavanagh because I think it should go on record that Australia, under the leadership of this Government is playing an important part in the Colombo Plan.

We are indebted to the Minister for External Affairs (Mr. Hasluck) for the notes on international affairs distributed with his speech. In those notes at page 68, the Minister referred to Australia’s external aid and since Senator Cavanagh brushed aside with a wave of the hand what Australia was doing in the way of external aid, I think it relevant to review some facts and figures given by the Minister. First, we should appreciate that external aid includes that given to Papua and New Guinea amounting in 1964-65 to £31.3 million. Then there is the bilateral aid programme which includes the Colombo Plan and aid under the South East Asia Treaty Organisation as well as other programmes in concert with our allies, mainly concentrated on the countries of South East Asia. Then we have what is described as multilateral aid. This covers the Australian contributions to worldwide programmes organised mainly under the aegis of the United Nations.

Since the Colombo Plan was instituted about 14 years ago, Australia’s contribution has totalled £53 million. Of this total, £38 million was spent on economic development projects and £15 million on technical co- operation schemes. Major recipients of this were India, Pakistan, Indonesia, Ceylon, Thailand and Vietnam. The value of technical assistance has exceeded £8 million.

We must realise that much of our aid to Asia is of a practical kind directed to the training of Colombo Plan students and technicians in Australia. Malaysia has been the main recipient of Colombo Plan aid. Australians go to Asian countries as experts and advisers. So I believe we should emphasise the practical value of the Colombo Plan. Senator Cavanagh raised these points but in my opinion he did not have the generosity to ascribe to the Australian Government the credit that is its due.

All our aid plans are geared to increase production in the countries concerned. I can illustrate this from observations I made when I was in South East Asia 18 months ago. In north east Thailand I visited a project where engineers and road builders from the Snowy Mountains scheme were assisting. I met there some highly skilled geologists from Australia who were making a survey of the foundations of a large dam it was proposed to build on the Mekong River. When this dam is completed in the near future it will ensure a steady supply of water for irrigation to assist rice production in at least three countries. It is almost impossible to comprehend the great benefits that will be conferred by Australia simply by sending four or five trained geologists who gained experience in the Snowy Mountains area. These geologists are doing a magnificent job to assist food production in South East Asia. I could give further illustrations but I want to emphasise that Australia, through the energy of this Government, is doing most valuable work along the lines to which Senator Cavanagh referred although he slurred over what is actually being done.

Like Senator Scott, I realise the great danger there is of the spread of Chinese Communism. Senator Cavanagh did not apply his mind to any effective way of stopping this malaise. He said the Chinese Communists were moving forward and that history had shown that when there was any effort, by war or otherwise, to stop Communism, its progress simply increased in intensity. He did not give Australia any hope in that connection. In a general sort of way he criticised the Government’s policy, but be gave Australia no hope that the progress of Communism would be stopped. He made the point that if people had sufficient food they were less likely to turn to Communism, but he did not say how the Communists could be stopped.

The Australian Government is doing quite a lot to stop the malaise of Communism relative to our natural resources of manpower and material. I can give two illustrations of this. When I was in Malaysia it was my privilege to see the security system in operation there. Senator O’Byrne was another of the delegation. There is no doubt that the Malaysian authorities from the Tunku down to the Chief of Security acknowledge fully the great benefit derived from the operations of Australian troops in saving the country from overthrow by the Communists. Our troops were there as part of the Commonwealth Strategic Reserve. The tactics adopted by the Communists ten years ago were directed to terrorising the population and particularly the farmers and peasants who were producing the rice upon which most of the community exists. As a result, there was less food. The Communists had to be rooted out and finally the security forces including British, Australians and New Zealanders, got the upper hand of the Communists. Today Malaysia is enjoying remarkable prosperity. It is easily the most prosperous country in South East Asia.

It was due to the fact that a strong stand was taken with regard to the Communists who were terrorising the little people - and these Communists were called terrorists - that the economy of Malaysia, by these methods, was restored. This action has been proved in Malaysia. I feel that if we have the courage and determination to take this course, as set out in the paper delivered by the Minister, then something of a similar nature will happen in South Vietnam. I can assure the Senate that, from my observations and discussions with people in government in Thailand, Burma, Malaysia, and the Philippines, it is important that we should stand up against these Communists who are in the nature of infiltrators, in the main.

I want to make some observations on what I heard when I was in Burma. The Burmese Government, as honorable senators may know, is known as a revolutionary government. The Chairman of the Revolutionary Committee, General Ne Win, is in charge there. He is surrounded by some of his leading military comrades. They govern this rather sad country in a more or less military fashion with the former government which has certain restrictions on its liberty. I believe that the great problem for the Burmese - they acknowledge this - is the fact that they have the Chinese Communists infiltrating to the north of them. There is a suspicion in that area that the Communists are only waiting, biding their time as it were, to move through Burma and use Rangoon as a jumping off point to Africa. This problem of the Chinese Communists is bedevilling the people of Burma. While the parliamentary delegation of which I was a member was in Burma, there was a truce between what were called the White Flag Communists and the Red Flag Communists. The Communists who were infiltrating right into Burma .were having disputes among themselves in this unfortumate country.

I can illustrate my point further, I think, with a reference to Thailand. As honorable senators know, Thailand is bordered by Laos on the north, Cambodia on the east and Burma on the north and north-west. The people of Thailand are in fear of infiltration by Chinese Communists into Laos and then into north Thailand. I will say to the credit of the Government of Thailand that it has caused highly imaginative and sound schemes to be implemented in north-east Thailand with the assistance of £1 million of Australian money. That Government has a large project for training young Thais to use earth moving and road building equipment. Those who are training them are former engineers and road builders of the Snowy Mountains Hydro-Electric Authority. The idea of the road building project is to bring part of the country under the control of the central government of Thailand in Bangkok at all times of the year because, in the very wet months, it is impossible for government to function without the roads. So, the Australian Government is setting its face in what some people might say is a very small way but in what I say is a very significant way against the spread of Communism from China. All over South East Asia I see these pressures by the Chinese Communists upon all contsituted governments - whether it is the revolutionary Government of General Ne Win, the Government of Malaysia which almost follows our pattern of government, or the rather autocratic Government of Thailand.

I say that the Minister for External Affairs is quite right in concentrating a lot of his statement on the problem of South Vietnam. I believe that the answer to this problem is not to pack up in the way that Senator Cavanagh has suggested, no matter how conscientious he may be in regard to these matters. No doubt those were the thoughts of his heart. In my opinion, it is not the thing to pack up and virtually let the North Vietnamese, inspired by the Chinese Communists, move through South Vietnam. The United States is right in the approach it is making. It has been very patient in the past and the attacks on the supply sources of the Vietcong are the correct methods to adopt.

I want to introduce another subject that was not mentioned in this very valuable paper presented by the Minister for External Affairs. It is not of great importance for me to go chapter by chapter through this paper. The Minister has made everything very plain. I hope that the Senate will agree to the motion to take note of it. But I accept the invitation of the Minister and, with your concurrence, Mr. Deputy President, I wish to develop a topic that is not actually mentioned in this paper although it is of great importance to the position of the external affairs of the Commonwealth. I ask honorable senators to cast their eyes to the east and to the north of Australia, to the Pacific Ocean, and particularly to that area I have mentioned, and to consider what Australia ought to be doing in those places which it may not be doing at the present time. A number of European nations are still interested in the 5 million or 6 million people who are living in towns on islands scattered throughout thousands of square miles of the Pacific Ocean. In this context I include the areas that come under the guidance of the South Pacific Commission.

Honorable senators may remember that, in 1 947, the Australian Labour Government became conscious of the importance of the Pacific to Australia. I say to the credit of that Government that it did absolutely the right thing. I should like to revive, in the few remarks I have to make, the interest of the Senate in the South Pacific area and, in particular, stress the importance of this vast area to Australia. There is no need for me to remind you, Sir, or any honorable senator, how much this area was involved in the last war. Some of the great battles of history were fought there. At the present time, everything has become rather quiet. But it is in these periods of quietness that we should not close our eyes to some very important happenings. I shall read the names of the countries in that part of the world which come under certain influences and I shall give also in round figures the populations of those countries so that the Senate will appreciate that there are a good many bodies there although, taken over all, this is not a thickly populated part of the world. Australia could show very great leadership in this region. It is interesting to note that Mr. Forsyth, a former SecretaryGeneral of the South Pacific Commission, is an Australian who was formerly a distinguished overseas representative of this country. The headquarters of the Commission is situated on the island of New Caledonia about three or four miles from the city of Noumea, which is the capital and largest town on the island.

The area over which the South Pacific Commission exercises control includes, from the standpoint of Australia’s responsibility, the island of Nauru, in respect of which a trust is reposed in us by the United Nations. It has a population of approximately 4,000 people. The South Pacific area also includes Norfolk Island, which has a population of approximately 1,000; Papua, which has a population of over half a million; and Australian New Guinea, which has a population of one and a half million. The island of Fiji is an important part of the area. It is a colony of the United Kingdom and has a population of 400,000, about one half of whom are indigenous people, the other half being migrants from Europe or India or people whose forbears were migrants from Europe or India. Also included in this area is the island of New Caledonia, which is really a part of France and which has a population of 80,000 people, about one-half of whom are French.

The South Pacific area includes the Solomon Islands, which constitute a protectorate of the United Kingdom and adjoin our own New Guinea islands. They have a population of 129,000 people. France has interests in Tahiti and French Polynesia which affect a population of 84,000, and the United States of America has trust interests which involve 81,000 people. The New Hebrides, with a population of 60,000 people, come under the control of a condominium formed by the United Kingdom and France. It will be seen that various metropolitan European powers and Australia have interests in the South Pacific area. Another very interesting country is Western Samoa, which recently became independent and which looks largely to New Zealand in the discharge of its external affairs and governmental responsibilities. In this area there are tremendous problems which could be tackled now to the great benefit of the people who are living there.

There is no need for me to explain to the Senate the importance to Australia and New Zealand of the small island of Nauru. As honorable senators know, it is from Nauru and small nearby Ocean Island that we draw most of the rock phosphate that we use. Nauru is of tremendous economic importance to Australia. We should not neglect the high level of prosperity and the future of the indigenous people of this island.

I should like to pay a tribute to the South Pacific Commission for the work that it is doing on a very limited budget. The Commission does not undertake any military responsibility under the provisions of a defence pact but is interested in the welfare, health, peace and urbanisation, if I may use that word, of the people in the area. The Commission pays great attention to such things as agricultural pests. For example, it is attacking the rhinoceros beetle which, if it were allowed to spread, would do enormous damage to the main industry of the area, which is based on the coconut palm. Experts from the Commission are tackling the problem of disease. The Commission has also undertaken practical projects, including boat building. The indigenous people are learning how to construct and repair motor boats so that their means of contact between the islands may be improved and so that they may be able to support themselves with successful fishing enterprises. As one who has been privileged to observe the work of the South Pacific Commission, let me say that on a shoestring budget it has done an excellent job.

I direct the attention of the Senate to the fact that on the eastern side of Aus tralia we have an area which is of great importance but in which, unfortunately, the Australian people, the Australian Government and the Australian Press and radio interests do not seem to be particularly interested. The Australian Government admittedly is spending £31 million annually in Papua and New Guinea, most of which is being spent on developmental projects. Great interest is being shown in the development of that Territory. But I should like to see more Australian interest in Fiji, which has a population of more than one million people. How many of us have ever been there? How many of us, when we have been flying to America, have spent any time there? This is a compact little place which is confronted by great problems which Australia could help to overcome. Already Australia has a commercial interest in Fiji. The Colonial Sugar Refining Co. Ltd. has a big interest there and the Bank of New South Wales has several branches. Mr. Theodore, a former Labour Treasurer, developed gold mines in Fiji. His action has caused a number of Australians to take an interest in mining on the island. In spite of these things, there seems to be very little contact between this important island and Australia. I should like to see contact established between the Australian branch of the Commonwealth Parliamentary Association and a branch which no doubt could be formed from the Fijian legislature. They have some very able Ministers in Fiji. I was privileged to meet in New Caledonia an Indian Minister who had been highly trained in the United Kingdom. In Fiji they have also local chiefs who are members of the Parliament. I believe that the movement of Parliamentarians between Australia, Fiji and per? haps the British Solomon Islands, which has a legislative council, could be of great importance in getting to know the people in the south Pacific who are attempting to do the same sort of job as Australia.

I understand that the small country of West Samoa has already interested itself in the Commonwealth Parliamentary Association and has sent delegates overseas. Last week and this week we received visits by members of the House of Assembly of Papua and New Guinea. Visits by parliamentarians seem to me to be a good method of getting to know better the people of the South Pacific area.

I wish now to say a word or two about the French. Honorable senators know that New Caledonia is not so much a colony or territory of France as it is-a part of France. For instance, a senator lives in New Caledonia who represents that area in the French Senate. There is also a deputy there. Three or four thousand troops of the French army are stationed in New Caledonia, together with two or three small ships of war. In other words, it is a part of Europe only about 900 miles from Australia. I think that there should and could well be more contact between us. The great Australian airline of Qantas Empire Airways Ltd. has done an amazing job in developing transport facilities between Australia, Fiji, New Caledonia and French Polynesia. The sooner we establish more contact with this part of the Pacific, the better for them and for us. I think it is worth mentioning to the Senate that Australia contributes the greatest part of the budget of the South Pacific Commission. Australian teachers and scientists are working in that organisation.

I have been very interested in the paper prepared by the Minister for External Affairs and the speeches that have been made in this debate. I think it is of advantage that at times the Senate should discuss such papers. The great maturity of Australia cannot be better illustrated than by the way we now take as a matter of course discussions on external affairs. It is not so very long ago that we did not have a Department of External Affairs. I understand that less than 30 years ago our foreign affairs were conducted through the Prime Minister’s Department and through one officer attached to the administration in the United Kingdom; that was the extent of our practical participation in affairs outside of this country.

The questions of defence, immigration, civil aviation and telecommunications are all looming large in Australia. That is why I welcome from time to time discussions on foreign affairs in this Parliament. Trade, communications, civil aviation and immigration are all matters of great importance to Australia and are interwoven in the clear guide to external affairs that has been prepared by the Minister. I am very grateful that in his paper Mr. Hasluck has paid attention to Australia’s relationship with other countries in the Pacific area, but I crave leave of the Senate from time to time to mention the importance of the areas to the east and to the north of Australia. After all, we cannot consider matters related to Australia’s external affairs without considering the important matters that emanate from the countries so close to Australia.

Senator COHEN:

.- The paper which the Senate is discussing is important and deserves close attention. I ask for leave to make my remarks at a later date.

Leave granted; debate adjourned.

Senate adjourned at 4.52 p.m.

Cite as: Australia, Senate, Debates, 25 March 1965, viewed 22 October 2017, <>.