Senate
11 May 1966

25th Parliament · 1st Session

  1. Senate
  2. 25th Parliament
  3. 1966

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 2.15 p.m., and read prayers.

page 925

QUESTION

REPATRIATION

Senator SANDFORD:
VICTORIA

– Can the Minister for Repatriation inform the Senate whether it is a fact, as I have been told it is. that all American ex-servicemen and their dependants receive hospital and medical treatment free of charge? If that is a fact, will the Government give very favorable consideration to extending at least those benefits to the few remaining veterans of the Boer War and the ever diminishing number of ex-servicemen from World War 1, when the next Budget is being drawn up? I do not want the Minister to reply by stating that this a matter of policy-

The PRESIDENT:

– Order! The honorable senator must not anticipate the Minister’s reply.

Senator SANDFORD:

– I am anticipating what he might say. Me will know that quite a number of ex-servicemen’s associations and individual ex-servicemen are vitally interested in this question.

Senator MCKELLAR:
Minister for Repatriation · NEW SOUTH WALES · CP

– 1 cannot say whether the facts about American exservicemen are as the honorable senator has stated them. The position of Australians in the categories that he mentioned has been exercising my mind for some months past. I have had many inquiries made concerning it. This matter will be considered in the course of the Budget discussions.

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QUESTION

FISHING INDUSTRY

Senator HEATLEY:
QUEENSLAND

– I direct a question to the Minister representing the Minister for Primary Industry. In view of the moneys expended from the Fisheries Trust Account on surveys in other Australian coastal waters, can the Minister advise whether the Department has plans for the survey and development of the fishing industry in Queensland coastal waters and those of northern New South Wales, particularly in regard to the processing of fish fillets from the Barrier Reef and the establishment of a tuna industry in these areas?

Senator MCKELLAR:
CP

– The Minister for Primary Industry has provided the following information in reply to the honorable senator’s question: Since the establishment of the Fisheries Development Trust Account a number of development projects have been financed from the Account following, in most cases, consultation with the fisheries officers of the States directly concerned. A major survey of the prawning grounds off the east coast of Australia, which indicated the potential of a number of prawning grounds, was so financed. In addition, the Commonwealth has shared with the Queensland Government the cost of (a) a two-year survey of the prawn resources in the Gulf of Carpentaria over the period 1963 to 1965; and (b) a tuna survey off the Barrier Reef during October-November 1965. The Minister has allocated additional funds for this survey to be continued during the period January-April 1967. As far as the Minister for Primary Industry is aware, no other proposals for the survey and development of the fishing industry in Queensland coastal waters and those of northern New South Wales have been submitted, but the Minister has expressed his willingness to examine any worthwhile proposals for the development of our fisheries.

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QUESTION

SOCIAL SERVICES

Senator CAVANAGH:
SOUTH AUSTRALIA

– 1 ask the Minister representing the Minister for Social Services whether the Department’s office in Adelaide sends out with cheques for maternity allowances an advertisement for the savings banks of Australia. If so, why should a Government department assist in advertising banks in competition with the Commonwealth Savings Bank?

Senator Dame ANNABELLE RANKIN:

– I think the honorable senator will realise that although I represent the Minister for Social Services, I do not have at the moment the information that he requests. However, I will be very pleased to refer his question to the Minister so that the information can be furnished.

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QUESTION

EDUCATION

Senator COHEN:
VICTORIA

– I refer the Minister in Charge of Commonwealth Activities in Education and Research to a question asked by me yesterday concerning the serious deficiencies in the qualifications of teachers in Australia as disclosed in the recent report of the Australian College of Education. I direct the Minister’s attention to the part of my question which he did not answer - whether the Government would re-examine its decision not to implement the recommendations regarding teacher training in the report of the Martin Committee. I ask the Minister specifically: Is this now a closed question, or is the Government still open to persuasion that teacher training should be tackled on a national basis and that the Commonwealth should provide the necessary finance?

Senator GORTON:
Minister for Works · VICTORIA · LP

– It must be perfectly clear to the honorable senator that he is asking for an indication of Government policy. He must know that that is not a subject for questions at question time.

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QUESTION

WOMBATS

Senator MULVIHILL:
NEW SOUTH WALES

– I preface my question to the Minister in Charge of Commonwealth Activities in Education and Research by referring to the recent action of some State Governments - notably that of Victoria - in eliminating the bounty on the slaughter of wombats. Will the Minister “confer with officers of the Wildlife Research Division of the Commonwealth Scientific and Industrial Research Organisation to see whether the Estimates for 1966-67 may include provision for a comprehensive assessment of the reproduction, movement and growth of wombats which would be an invaluable guide to the State Governments in their future policy in this field?

Senator GORTON:
LP

– The Director of the Wildlife Research Division of the C.S.I. R.O. is Mr. Frith, as no doubt the honorable senator knows. Mr. Frith is responsible in the first place for working out the types of surveys which he regards as of the highest priority for his Division. Subsequently, an approach is made to the Executive of the C.S.I. R.O. where his suggestions are considered in conjunction with suggestions from various other Divisions. All that I will say that I will do is to bring the honorable senator’s suggestion to the notice of Mr. Frith.

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QUESTION

VIETNAM

Senator MURPHY:
NEW SOUTH WALES

– My question is directed to the Minister representing the Minister for External Affairs. I refer to the Government’s inability to answer yesterday a question about the truth of a reported statement by Air Vice-Marshal Ky. Is the Government now able to state what was said by Premier Ky about his retaining office into 1967 and about his intention to oppose any neutralist government which should be elected? Would the Minister also state whether we have any independent sources of intelligence in Vietnam? If so, what are they?

Senator GORTON:
LP

– In the first place, I think it should be made perfectly clear that I am representing the Minister for External Affairs in the Senate. In reply to a question asked yesterday by Senator Murphy i did not say that the Government was not in a position to remark upon it. I said that I was not in a position to comment, as Minister representing the responsible Minister in another place. If the honorable senator wants an expression of view on this matter from the responsible Minister, I believe he should place his question on the notice paper and I will see that he receives a reply by letter, if it is not available by the time the House rises. To the question of what sources of intelligence are available to the Australian Government in various overseas countries, I do not believe that Senator Murphy expects me to supply an answer.

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QUESTION

DEFENCE

Senator TANGNEY:
WESTERN AUSTRALIA

– I wish to ask the Minister representing the Minister for Defence a question. In view of the fact that for the past 15 years or so I have repeatedly placed before the Minister, or his predecessors, the necessity for a naval base for the adequate protection of the Indian Ocean and South East Asian areas, such base to be situated preferably on the Western Australian coast, can he inform the Senate what is the present situation in this matter, considering the doubt as to the future of Singapore as a naval base?

Senator GORTON:
LP

– I think that the honorable senator should put the question on notice. I, personally, know of no definite plans at the moment for anything along the lines she has suggested.

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QUESTION

POSTAL DEPARTMENT

Senator HEATLEY:

– I ask the Minister representing the Postmaster-General: In view of increased and intensive development of the Cape York Peninsula area will he advise the Senate of the possibility of having a weekly mail service instead of a fortnightly service as at present, particularly to Merluna. Batavia Downs and Moreton Telegraph Station, per bush pilots or other methods?

Senator ANDERSON:
Minister for Customs and Excise · NEW SOUTH WALES · LP

– The honorable senator is inquiring about improved postal facilities on Cape York Peninsula and I am in a position to inform him. on behalf of the Postmaster-General, that most services in the Cape York Peninsula area are on a weekly frequency, the main exception being mail service 871, which serves 17 properties between Laura and Coen on a weekly frequency, while two other properties on this sector and nine properties north of Coen are served fortnightly. The possibility of serving all properties on mail service 871 on a weekly frequency was examined during the 1965 mail service tender call, but the cost at that time was considered excessive. In view of what appear to be changing circumstances the Postmaster-General is arranging for a re-examination to be made to ascertain whether development in the meantime has resulted in any reduction in costs to the Post Office which could warrant an increase in frequency as requested.

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QUESTION

HOUSING

Senator McMANUS:
VICTORIA

– I direct a question to the Minister for Housing. What percentage of the money made available under the last Commonwealth and State Housing Agreement was made available by each State to building societies?

Senator Dame ANNABELLE RANKIN:

– I understand that the honorable senator wants to know what percentage each State allocated to the Home Builders Account.

Senator McManus:

– The thirty per cent, or more, under the Agreement.

Senator Dame ANNABELLE RANKIN:

– The £15 million additional assistance that was recently given to the States was made available in accordance with the terms of the Commonwealth and State Housing Agreement which provides that not less than 30 per cent, of each State’s grant should go to the Home Builders Account. All the States agreed to this. Queensland has made 40 per cent, of the money available to the Home Builders Account and South Australia allocates approximately 50 per cent, for this purpose.

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QUESTION

TRADE

Senator FITZGERALD:
NEW SOUTH WALES

– My question is directed to the Minister representing the Minister for Trade and Industry. Is it true that Australia’s trade deficit for the first 10 months of this financial year was $288,600,000, or almost S100 million greater than that of last year? Can he advise whether this adverse trade balance is causing great concern or worry to the Government and, if so, what plans has the Government to offset this adverse balance which, if not corrected immediately, will create greater dangers to our economy?

Senator HENTY:
Minister for Supply · TASMANIA · LP

– I think the figure that the honorable senator mentioned with regard to our adverse trade balance for the 10 months of this financial year is about correct. He asked whether it is an alarming deficit and I reply to him by pointing out that the reserves which Australia holds for contingencies such as this are considerable. In addition to those reserves drawings are available to us from the World Bank and the International Monetary Fund, so that, altogether, Australia’s position at this stage is in no way alarming.

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QUESTION

IMMIGRATION

Senator MCCLELLAND:
NEW SOUTH WALES

– My question is directed to the Minister representing the Minister for Immigration. Has the Minister seen recent reports that thousands of Greek migrants in Australia are being asked to pay the Greek Government sums of money to avoid serving in the Greek Army if ever they return to their country? Has this matter been brought officially to the notice of the Australian authorities? Is the Minister aware that the Greek Government is writing to the parents, who still remain in Greece, of some of these migrants, many of whom are not yet naturalised, saying that they are expected to pay sums from SI 00 upwards because their sons have not made themselves available for military service in Greece, and that the parents in turn are writing to the migrants asking them to transmit the additional money home to meet the requirements of the Greek authorities? Can the Minister state the actual position in regard to the responsibility of these migrants, many of whom are not naturalised, and whether or not they have to meet the sum demanded? What action does the Government intend taking to protect the interests of these people who are resident in Australia?

Senator Dame ANNABELLE RANKIN:

-I inform the honorable senator that the fact that such requests are being received by naturalised Australians has been brought to the notice of the Government. As the honorable senator will realise, the matter is one which requires, and is receiving, very careful examination by the Departments concerned.I inform the honorable senator that for the present it is not possible to make a full statement about this matter, but he may rest assured that everything possible will be done to protect the interests of the Australian citizens in question and to deal with the matter which he has raised.

page 928

QUESTION

WEAPONS. RESEARCH ESTABLISHMENT

Senator CAVANAGH:

– I desire to ask the Minister for Supply a question. Has the Salisbury Council in South Australia made an application for a building approximately 50 feet by 30 feet to be used at the weapons research establishment at Penfield in South Australia by the local civil defence organisation? Will the Minister recognise the valuable work of such organisations and assist where possible in the provision of the necessary buildings in suitable localities near to the centres of population?

Senator HENTY:
LP

– Yes, I understand that the Department has received representations from the Salisbury Council. I myself have received representations from Senator Davidson of South Australia and now from Senator Cavanagh. Realising the value of the building to the civil defence organisation. I will use my best endeavours to see whether it can be made available.

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QUESTION

TAXATION

Senator O’BYRNE:
TASMANIA

– I direct a question to the Minister representing the Treasurer. In view of the fact that people living on King Island who require specialist medical services have to travel to Melbourne or Launceston at their own cost, will the Treasurer consider, in the discussions on the forthcoming Budget, providing a taxation zone allowance to the residents of King Island?

Senator HENTY:
LP

– The taxation zone allowance for residents of King Island and

Flinders Island has been under consideration for a considerable time. 1 have no doubt that this matter will be considered when the Budget is being discussed in the next few months.

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QUESTION

DESERTED WIVES

Senator WRIGHT:
TASMANIA

– My question is directed to the Minister representing the Minister for Social Services. It relates to a subject which is not new in my references to the Senate but has persisted over a number of years. I refer to the item which has appeared in the Budget to the tune of between £3 million and £5 million, over the last three years, providing for widows’ pensions for deserted wives. My question is: Will the Minister provide me with information as to whether in the last 12 months there has been a departmental review of the efficacy of procedures for enforcement of maintenance for the benefit of deserted wives and children so as to reduce this load on the Treasury under the social services items for widows’ pensions?

Senator Dame ANNABELLE RANKIN:

-I am very aware of Senator Wright’s concern with this particular matter. He has brought it up in this chamber on more than one occasion. I know that many other honorable senators are concerned also with this subject. I will have a great deal of pleasure in discussing it personally with the Minister for Social Services and will endeavour to get an answer.

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QUESTION

DRUGS

(Question No. 793.)

Senator MULVIHILL:

asked the Minis ter for Customs and Excise, upon notice -

  1. Did the United States Government recently extend considerably the ambit of drug control to include barbiturates (goof balls), amphetamines (pep pills), L.S.D. and peyote mescaline?
  2. Does the Australian schedule controlling drug imports include all these types on its controlled list? If not, in the light of United States experience, will action be taken along these lines?
Senator ANDERSON:
LP

– The answers to the honorable senator’s questions are -

  1. Yes. I am advised that the controls were imposed by the Drug Abuse Controls Amendments of 1965 which amended the United States Drug Abuse Act.
  2. Such substances are not at present subject to Australian import controls. However L.S.D. and other hallucinogenic substances such as mescaline, will shortly be added to the list of drugs in the Fourth Schedule to the Customs (Prohibited Imports) Regulations. The importation of drugs in the Fourth Schedule is prohibited unless the written consent of the Minister for Customs and Excise is obtained. The prohibitions will be administered in consultation with the Minister for Health and, in practice, only those substances which are for bona fide medical or scientific use will be permitted importation. Barbiturates and amphetamines as such are strictly controlled under State legislation, being available only on medical prescription. Accordingly controls over importation into Australia are not at this stage considered necessary. However the position is being kept under constant review.

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QUESTION

RAIL STANDARDISATION

(Question No. 877.)

Senator BISHOP:
through Senator Ridley

asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. Were discussions held between the Commonwealth Government and the Governments of New South Wales and South Australia, and between the Commonwealth Government and the Silverton Tramways Company during 1964 in connection with the standardisation of the section of railway between Cockburn and Broken Hill?
  2. Did the Minister, in October 1965, indicate that a survey of an alternative route had been completed but that no decision had been made in respect to such alternative track or as to who should operate this railway?
  3. Is there reason to believe that the delay in deciding these questions, particularly the future of the Silverton Tramways Company’s operations, has created a situation where the Silverton Tramways Company’s rolling slock operating over parts of the South Australian Government’s system is not receiving standard workshop maintenance?
  4. Does the Minister agree that the standardisation programme is such as to necessitate an early decision on these matters?
  5. Is the Minister in a position to report on discussions in connection with standardising the Adelaide-Port Pirie railway track?
Senator ANDERSON:
LP

– The Minister for Shipping and Transport has supplied the following answers - 1 and 2. Yes. My October statement also indicated that there are some complex constitutional and legal problems involved.

  1. I have every reason to believe that all essential maintenance on rolling stock operated by the Silverton Tramways Company is being carried out. and that all safety requirements are being fully met.
  2. Discussions between the South Australian, the New South Wales and the Commonwealth Governments are proceeding, and an announcement will be made as soon as firm decisions have been reached. So far as can be foreseen, this will be done in time to have the work between Cockburn and Broken Hill completed by December 1968, the date the current standardisation work in South Australia and Western Australia is programmed for completion.
  3. The possibility of standardising the line between Adelaide and Port Pirie has been discussed with the South Australian Government, and at present I am waiting on the result of a detailed survey, before proceeding with these discussions.

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QUESTION

KANGAROO MEAT

(Question No. 879.)

Senator MULVIHILL:

asked the Minister for Customs and Excise, upon notice -

  1. What quantity of kangaroo meat was exported for the period 1st January to 31st March 1966?
  2. To which countries was the meat exported?
Senator ANDERSON:
LP

– The Commonwealth Statistician has advised that 1,307,771 lb. of kangaroo meat was exported during the period in question. Destinations were Japan, United Kingdom, Malaysia, Hong Kong, Singapore, United States of America, Bahrein and Norfolk Island.

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ORD RIVER PROJECT

Formal Motion for Adjournment

The PRESIDENT:

– I have received from

Senator Willesee an intimation that he desires to move the adjournment of the Senate for the purpose of discussing a definite matter of public importance, namely -

The failure of the Government to proceed with the next stage of the Ord River irrigation project as requested by the Western Australian Government.

Senator WILLESEE:
Western Australia

.- I move -

That the Senate, at its rising, adjourn till Thursday, 12th May, at 10.30 a.m.

I wish to say a few words first about the general subject of northern development as a backdrop to a discussion of the failure of the Government to accede to the request of the Western Australian Government to complete the Ord River scheme. We are not discussing the initiation of a project. The Ord River scheme has already attracted the interest of the Government. It is a question of whether the Government is really serious about northern development - sadly,I am beginning to doubt it - and has the courage to proceed with the Ord River scheme, which epitomises northern development.

There was a time when many supporters of the Government criticised anybody who suggested that northern development should have some precedence in the Government’s thinking, called him a dreamer, and said that he was adopting an unrealistic approach. Such an attitude, of course, is in line with the Liberal philosophy that nothing ought to be done unless it returns a profit. That attitude was displayed by the present Government parties’ opposition to the Snowy Mountains scheme at the time of its inauguration. They criticised that scheme, which was initiated by a Labour government, because they said that it was socialistic in character. They criticised the economics of the scheme. Eventually, when they assumed office, they saw the wisdom of it. By that time, of course, they were not able to unscramble the egg. The Government has displayed the same attitude in relation to the retention of the Snowy Mountains organisation. The Australian Labour Party says that this band of brilliant men who have gained unique experience ought to be retained for the benefit of Australia and not allowed to drift to other countries, because development generally, and northern development in particular, constitute a constant challenge to the Government. We were backed by people like the late Sir Warren McDonald on the question of the Ord and we have had people such as Sir Harold Raggatt also criticising the minute scrutiny that the Government has been applying to the Ord scheme and to northern development. It seems amazing to me that these are the people that the Government itself appointed as its advisers in various fields but whose advice it was not ready to accept when it came to a question of development, and especially northern development.

Every weapon has been used to move the Government on northern development. We have had the stick used by people, of whom I have mentioned only a couple, who believe that Australia unlimited is something real, not something to be used by the Liberal Party at the time of elections for the purposes of rhetoric. These are people who believe in the north, who believe in the development of Australia, and who believe that Australia unlimited ought to be made to work, if necessary by using a stick on the Government on the question of northern development. This motion that I have proposed today is another little flick on the rump of this mulish Government. The only thing that we have seen to make this mule move at all has been not a stick but the carrot of electoral gain. We had our hopes raised very briefly after the 1961 election, when one would have thought that the gravamen of Government thinking was northern development. The word “ brigalow “ first came into common usage in this Parliament. We heard a lot about beef cattle roads in Queensland and Western Australia, and at long last we were able to get the Government to move on the Ord. But, of course, after the 1963 elections one would have thought that the curtain had descended on the face of the Government and that it had been gagged on the subject of northern development, because the Ord is in the electorate of Kalgoorlie and it became apparent to the Government that it was not going to win back that seat. The Northern Territory was held, as it is held now, by only one member in a non-voting capacity. In northern Queensland some seats swung back to the Government, and that was the end of northern development.

I hope that I am not cynical on this matter. I hope that my anaylsis of it is wrong. As an Australian I say that, but as a person having to live close to politics and having to watch in action this Government, whose sole thought from one year’s end to the other is to stay in office, I am forced by an honest analysis to say that with all the goodwill that has been displayed and all the energy that have been used to force the Government into northern development, the only thing that ever got the Government to move was not the belting with a stick on the rump of the donkey but the carrot in front of the donkey. The Government reminds me of the character Saltbush Bill. It has sparred, it has fought and it has shifted ground. Boy, has it shifted ground. Its laissez-faire approach is to say: “ As long as we have a little more population this year, as long as income tax is round about the same, and as long as we can go to an election and say that things are pretty fair, this is good.” The Government is fortified in this approach by the fact that we have in Australia a unique position in that the southern States are not yet completely developed. This is seen to be so, when we check the position against standards that apply in some parts of the world, and consider our own knowledge of how development could take place.

I suppose thai some Victorians and Tasmanians may argue with this, but it can be said that almost the whole of Victoria and Tasmania could still have more population and more development. Some parts of New South Wales could certainly have more development. South Australia and Western Australia could have more development. This laissez-faire approach is the approach behind which the Government is hiding, lt is not facing up to a situation where the distribution of the population is 12 or 13 to 1 in favour of the southern areas as against the north. Any government that wishes to call itself an Australian government is faced always with the situation that 98 per cent, of the population lives in one-quarter of the continent and 45 per cent. - almost half - of the area carries 1 per cent, of the population. Believing as we do in the one-world philosophy, how can we face the stirring nations today when we have in Australia three and a half people to the square mile whereas Europe has 100 to the square mile and when many Asian countries envy even the European figure? It is not unrealistic and one is not a dreamer - surely the Government should drop that catchcry now - to want to do something in the area around the Ord, in the Gulf country and in the Northern Territory.

We have heard a lot about criticising of the sacred cows of other countries but is it unrealistic for anyone to say that pastures in the Gulf country over which 100,000 useless buffaloes are running should be taken over and used for the breeding of cattle? Modern geneticists could give us a lead on the type of cattle to breed. This is being done elsewhere in the world in places like the King Ranch in America and in Pretoria in South Africa. Those countries have set a pattern for us to follow. There is nothing radical about this suggestion.

It is not unrealistic to say that the Government should be adopting methods which have been adoped in other parts of the world in relation to the desalination of water, in relation to mining, in relation to fishing - an important industry to an island nation like Australia - and in relation to cattle breeding. But no matter how this Government has been driven, no matter how many people have put different projects before it, it has rejected them all. The Labour Party has said that if it were the

Government it would set up a Ministry of Northern Development with a full time Minister, but the Government has not taken any notice of that. We have suggested the setting up of a commission which could spend millions of pounds in the north just as the National Capital Development Commission is spending millions of pounds in Canberra. This suggestion has been rejected. The Governments of Queensland and Western Australia have wanted to form a triumvirate with the Commonwealth Government to develop the north. This also has been rejected. The Commonwealth Government has rejected out of hand any suggestion of taxation relief for individuals and companies engaged in the north. All that the Government has done is set up a division which it has itself frustrated since the 1963 election.

At the outset 1 said that I wanted to mention only hurriedly the matter of northern development generally. I turn nov to the specific proposition that I advance today relating to the expenditure of additional sums on the Ord River project. Between 1961 and 1963 we were able to force the Government into a position when it said finally “ We will spend £6i million on the Ord River project.” We believe that a great challenge faces the Government. It has a wonderful opportunity to develop this part of the country on sound economic grounds - that surely should appeal to the Government - by the expenditure of an additional £24 million over a period of years to bring this great project to fruition. It is not a matter of forking out £24 million in any one year and upsetting the Budget. Not more than £2 million need be spent each year. The Government should not hesitate because it has the benefit not only of the advice and confidence of the Western Australian Government but also the experience that has already been gained on the Ord. In this project is epitomised all the features of northern development about which I have been speaking - the challenge, the opportunity to develop Australianism and the will to get things done. Here, the Government’s shortcomings are obvious.

Have we ever stopped to think what was the genius that got the Snowy Mountains job under way? There was no problem of geography, of engineering, or of insufficient water. This project had been on the mee for 70 years. The genius lay in that great Australian, Chifley, who said: “ Go ahead and we will pay for the job. We will put the resources of this growing nation behind the project.” At that time is was not a matter of £24 million; it was a matter of £400 million. But Chifley said that we would do this job over a period of years and this Government, to its credit, about-faced and followed Chifley’s lead.

Now we find the Government boggling on the Ord, shifting ground at every opportunity, when only an additional $24 million is involved. We should remember that Chifley had to begin from the grass roots. Nothing had been done. All that we are asking the Government to do is to proceed with a proposition on which it has started. We have made a step by step drive to get the Government even to look at northern development and the Ord River scheme. Originally, Western Australia put to the Commonwealth a proposition for the establishment of a research station in the Ord River area. It was financed on a 50-50 basis. It operated for 12 years. I remember asking Sir William Spooner questions on this subject when he was Minister for National Development. I asked him what was happening. He pointed out time and again that the research station was proving that certain crops could be grown economically. Finally, the Government just could not find any fault with the scheme. Year after year, under every trial favorable results were coming forward. At that time it was obvious that the scheme had been proved up to the hilt and there was nothing for the Government to do except to say, “ In spite of that, we will shelve it “, or “ We will go ahead with it “.

The Bureau of Agricultural Economics made two separate surveys. It examined the production of cash crops. On top of all the basic research that had been done, it examined what were the best crops to grow. It did that after trials had proved what crops could be grown. After it was found that the soil was suitable and that there was an abundance of water, the economics of the scheme came into the matter. Nothing was left to chance. It is true to say that no major scheme in the history of Australia has had more money spent on research in respect of it than has the Ord River scheme. So nobody can claim that this matter has been dealt with hastily; that we do not go where we are going; or that we have not gone as far in the field of research as the Almighty has given man the power to see into the future. This is an economic project. It is a development project which a young developing country ought to be grasping with both hands. The Government should not have to be goaded into it, as we are trying to do today.

The research showed that there was water in abundance and that there was soil in abundance. It also showed how to marry those two things. From that point, estimating was made possible. We were able to assess the problems of containing the water and of disposing of the water and what the cost to the farmers would be. All the matters that farmers in such areas had to deal with were examined. The matters of flooding, siltation, drainage, establishment costs and the earning capacity of the farms when put into production were examined. This work was backed up, as it should be, with data on such things as the effect of water on the soil and problems such as diseases and pests. Tn short, it is true to say that all the hazards that could possibly face the farmers were examined. On that foundation the Bureau of Agricultural Economics further examined the matter of the best cash crop or crops to grow. One crop stood out. That was cotton. Never has the pessimistic eye of government been used with the microscopic attention with which it has been used in respect of the Ord River scheme. Everything that T have said is reliable and can be checked in the records. Anybody listening to me would ask: “ What are we waiting for now?” That is the very question that we are asking today.

If this scheme was in a city or in a southern area where there were alternatives and the Government could say, “ Surely we can find a better project in the heart of Sydney or Melbourne for the investment of Commonwealth money”, the Government’s approach would be understandable. But in this instance, in which less than a 100 per cent, guarantee should be accepted, the Government is applying standards more rigidly than it would be in respect of any other project. Sir Harold Raggatt, a person on whom at one time the Government leaned for advice, has said that far too much attention has been given to looking over the economics of this project. There is a vast difference between private investment and government investment. A businessman invests in something only as a short term project and in order to make as much money as he can. But why does a government invest in something? Nobody is suggesting that a move should be made into a project which is economically unsound, but surely the criteria to be used are vastly different from the standard of profits. Surely a criterion is the extent of the Government’s obligation to the people of Australia, including the Aborigines, whose conditions have a bearing on this issue. Another criterion is surely the development of these areas, having in mind a hungry and starving world. The proximity of the Ord River area to the Asian markets is also a relevant consideration. Senator Sandford reminds me, very aptly, that the question of defence is another important consideration.

After all the tests were conducted and proofs up to the hilt obtained, we finally got the Commonwealth Government to move by providing finance. A little over £6 million was spent on the Ord River scheme. Sir Robert Menzies, who was then Prime Minister, made a very special trip t’ to the Ord. He described the scheme as a I master stroke. I would like to underline his oratory and ask honorable senators to listen to his words. He said -

Wc arc nol at the end ot something here today. We are at the beginning of something. We must go on and on and on if these great areas of Australia are to grow and become effective contributors to Australian life.

Today we are asking the Government to go on, just as the former Prime Minister said that the Government would go on. Do not stop. Complete this project. Make the Ord River scheme the great scheme that it can be, so obviously.

In replying to the Opposition’s proposal today, I ask Government supporters to tell us what more they want to be done. Research has been conducted in greater measure than on any other Australian project. Cotton is being produced commercially in the area. It has proved itself to be a profitable crop. Harvesting is to commence at Kununurra this week or next and the farmers there confidently expect that the crops will be bigger than ever before. It is true that the farmers in the Ord River area are relatively inexperienced in growing cotton. I do not disagree that they should concentrate on cotton growing and become efficient at it before they turn to other crops. But the indications are that cotton growing is so profitable that it will be a long time before it will be necessary for the farmers there to look to other crops to make profits. The Commonwealth Scientific and Industrial Research Organisation has shown in its investigations that crops producing up to 4,000 lb. an acre can be grown. At present crops producing 2,000 lb. an acre are being grown. Some farmers have obtained 3,000 lb. an acre. I do not ask honorable senators to accept the figure of 4,000 lb. an acre. I am aware that results can be obtained in experimental conditions which cannot be reproduced in the field. The point is that the C.S.I.R.O. is in a position to indicate that the cropping results will not go back. Every indication is that they will go forward.

I was most interested to read the report of yesterday’s debate in another place. I did not intend to refer to it until I read an astounding statement on the cattle industry by one Liberal member. Anyone who has lived in the north-west of Australia knows that the cattle industry is not conducted very efficiently there. It is run on the open range. It has the disadvantage of having overseas capital invested in it. The situation is vastly different from that of a small farmer who takes a pride in his property and wants to develop it in order to make profits. Overseas investors match the return from money put into the cattle industry there against the returns to be obtained from investment in other parts of the world. An inbred peculiarity in the cattle industry in the northwestern areas is that breeding stock and calves have a tremendously high mortality rate.

Cotton growing in the area has provided an opportunity to utilise one of its byproducts. This is an aspect which is always worrying in outback industries. It is an aspect which bedevilled the air beef scheme. A natural supplement to the diet of cattle is available. It is not a question of fattening cattle but of keeping the breeding stock and calves alive during the extremely long dry season. That period is of tremendous benefit in the cotton harvesting period, but has a severe effect on the cattle industry. At that time when food is short, the cows are calving and there is a tremendously high mortality rate. It has been proved that the byproduct of crushed seed, after it leaves the cotton ginneries, is of great benefit to the cattle. 1 was amazed and alarmed to read of what I fear is the attitude of the Holt Government as reflected by the honorable member for Bowman (Dr. Gibbs) in another place yesterday. When dealing with the question he scorned the idea that we should supplement the feed of cattle and finished up with a pearl of wisdom which ought to be written into every humourous book in Australia. He said: “ Admittedly, cattle could be kept alive, but the more beasts that were kept alive the more money would be lost “.

Nobody can tell me that people are rearing cattle over there just to lose money. If they were 1 assume that the best thing to do would be to kill all the calves immediately they were born and so make a fortune. I cannot understand how the honorable senator reasons in this way and why he tries to knock the economics of the Ord River scheme. I hope that the Minister, when replying, will tell me whether he agrees with this amazing piece of economic deduction. When one examines the Ord River scheme closely one wonders what more the Government could want for development in any northern situation. Surely there is no argument about the water or the soil. As I said a little while ago, the experts tell us that the long dry season is almost perfect for the harvesting of cotton. Not only is there water available, but it is cheap and the land is cheap. When we compare the price of land at the Ord with what the cotton farmers have to pay in America, we see that it is almost unbelievably cheap. On the Ord River we have a development scheme which is amazingly cheap. In order not to waste time I shall give only two figures in this regard. Water from the Ord costs £2.6 per acre foot, while water from the Blowering Dam cost £17 per acre foot. In case honorable senators think that I have taken a ridiculous figure for comparison, I point out that the Blowering Dam figure is about a middle figure for irrigation water. The cost at some dams is very much higher and at some it is lower.

We have a market for cotton in Australia and we are in proximity to the Asian markets. Japan is the biggest importer of cotton in the world, and if it is thought that that market might burn out let me say that the statistics show that today Japan is importing 120 times the total cotton production of Australia. So that market will not burn out. We ourselves are using more cotton and the people of the emerging countries will be using more cotton. In addition, we have at Wyndham on the Western Australian coast, one of those rarities, a deep water port, only 60 miles from the Ord project. Then there is the advantage of the bounty. Although people talk about it being a high bounty, and it is a high bounty, it is only comparable with that paid in America. We produce nearly all our primary products cheaper than does America. We produce wheat and meat cheaper than America does and we have advantages over America in the production of cotton. We are closer to the Asian market than are the gulf ports of America and we have cheaper water and cheaper land. It is undoubted that we can compete with America in cotton growing.

It is not a question of making a beginning on the Ord. The Government has already spent £61 million there. It is not a question of saying that £24 million has to come out of one Budget, because a grant of £2 million a year would easily bring the scheme into being and develop it fully. An economic analysis of the kind applied to the Ord River project has never been applied to any other such scheme in Australia. The blunt fact is that this is not a question of economics. There are no votes in this area, as the Government proved in 1961. The Government has no intention of moving in northern development. Its sole criterion is how to stay in office even if it has to let the rest of Australia go bust. Failure to develop the north is not the action of an Australian Government. As I have pointed out, the Ord has everything that a development project needs. It has the water and soil and proximity to markets. It is not a question of admitting the possibilities of the area. The Government did that when it started the scheme. Surely it admitted the possibilities when it spend £6i million on the scheme. It must have known of the possibilities when it agreed with the Western Australian Government that a research station should be set up there. If the Government will not back this scheme I do not think it will back any other. We are told that the Government wants to see more crops grown on the Ord because at some future time a crop there might fail. But that argument can be applied to any primary industry - for instance the crayfishing industry. How do we know that the crayfish will still be in Western Australian waters next year? But it does not mean that we do not go ahead and develop the Ord River project for the good of the country and our export markets. We do not know enough about these matters. The scientists have not told us enough about them so that we may know that if we put certain things into the ground we will get certain things out of it. The members of the Country Party who should know something about farming - although most of them are city farmers - surely should be saying that these are reasonable risks to take in relation to the Ord River project.

Research authorities have faced up to every problem with which a farmer could conceivably be confronted. The Government should face up to the question of the Ord River project. It is a testing question. lt epitomises all the things that we hear about northern development. If the Government is not going to face up to the Ord River project, with all these natural attractions, it is not going to face up to anything.

Let me return to something that the former Prime Minister, Sir Robert Menzies, said about the Ord just after he made a statement that he was British to the boot heels. He said that the Ord River project was far more interesting and far more exciting than anything that had happened in Kew or Kooyong in Victoria. He said that we must go on and on. Let me now refer to something said by a man who was Australian to the boot heels. When he was faced with the Snowy Mountains scheme, he said: “ We, as a Government, are prepared to put the resources of the country behind it “, to the extent not of £24 million but of £400 million. The people of Australia are asking the Government to put the resources of the country behind the Ord River project. They are asking the Government to back its first bet. The Government has proved beyond any shadow of doubt that the Ord River project is an economic proposition.

The Government has a responsibility for the development of Australia. It also has responsibilities in regard to Aborigines and to do what it can to produce foodstuffs to feed a starving world, especially as there is a hungry market, with its jaws wide open, close to our shores. If the Government were to drop this question of subsidy, the people in the south would be struggling to grow cotton whereas the people on the Ord River project would not. Our cotton could compete, not only on the Japanese market, but also on cotton markets elsewhere. There is nothing lacking in the Ord River project except that the Government will not, under any consideration, face up to the question of northern development.

Senator CORMACK:
Victoria

.- After listening to my friend, Senator Willesee, my mind in the last few moments has been moving back to that charming satirical piece of writing by George Orwell called “ Animal Farm “. Honorable senators will remember it. One of the characteristics of Orwell’s Napoleon was to attempt to persuade the people to stay on the farm by saying: “ Have faith because eventually you will come to the Sugar Candy Mountains.” In fact Senator Willesee in his spiel to the Senate this afternoon has been telling us to lift up our eyes to the Sugar Candy Mountains. He has been allying the Sugar Candy Mountains with the Snowy Mountains project on which the sum of $800 million - I now put it in the modern currency although Senator Willesee, being slightly old fashioned, put it in currency that is no longer in existence - has been spent. The Snowy Mountains scheme was commenced under the aegis of the great Prime Minister of the day, Mr. J. B. Chifley, whom Senator Willesee holds in high regard.

Let us be clear about this matter. The concept on which the Snowy Mountains scheme was begun was to use a constitutional device - ‘this is what the Snowy Mountains scheme is all about - in order to produce power, because it was thought that power would be required on a massive scale, and there was a shortage of power in Australia, in the processing of matters related to atomic energy. But the arithmetic, the costing of the scheme, was based on the great benefits that were going to flow to the Murrumbidgee valley from irrigation. That was the real justification of the scheme. The great benefits that would flow from the scheme were to come from irrigation. Electricity, as a by-product to the great dams, was to be an addition to Australia’s power resources. It has now been discovered that because of the inability of even the most accurate research officers to penetrate beyond the veils of the future, the Snowy Mountains scheme has been justified on the basis of hydro-electric power and not on the basis of irrigation. This shows how careless one can be when dealing with projects of the vast order which Senator Willesee is projecting in his mind for Northern Australia. It is not quite clear yet as to what can be done by way of northern development. I accept northern development. Every honorable senator sitting in his place on this side of the chamber believes that there has to be some development in the north in the next period. But Senator Willesee has been involving himself in the last half hour in special pleading for one particular project in north western Australia. He is entitled to believe in the 19th century concept that westward is the course of empire. But there are a lot of people living on the eastern side of the empire. There has to be reasonably uniform development all over Australia, not only in Western Australia.

This Government, which Senator Willesee has spent the last 30 minutes vilifying, has spent in fact the sum of $1,000 million in northern development over the last five or six years. Let me read some details to the Senate. I have not got all the information but have just jotted down some of the amounts that this Government has spent on northern development. Honorable senators who are interjecting should listen to this. This Government has spent the sum of $5 million on beef roads in the Northern Territory. It has made a loan to the Queensland Government of $20 million for the Mount Isa-Townsville railway. It has made a loan to the Queensland Government of $3.3 million for development at Weipa. For development in Western Australia, relating to iron ore and related services in that State, it is providing for a projected expenditure of between $4 million and $5 million. There has been spent on the Ord River the sum of $12 million for the first diversion at the Bandicoot Bar. On the research station mentioned by Senator Willesee the sum of $2 million has been spent. In Queensland, $16 million has been used for beef roads. This year there fs an additional $2 million for beef roads in Queensland. In Western Australia, $7.5 million has been spent on beef roads and there is a projected expenditure this year of $1.5 million.

When one goes on it adds up to a vast sum of money which has already been spent on northern development in Australia. That is irrespective of the development at Gove which will amount, probably, to another $100 million. There has been a vast sum of money already spent on northern development in Australia over the last seven or eight years - more than has been spent on the Snowy Mountains Hydro-electric Authority in the south east of Australia.

I mentioned that there had to be uniform development. Of course development has to be uniform. We cannot spend the whole of the resources of Australia just to keep Western Australia going. The capital generating area of Australia at the moment is New South Wales and Victoria. It may be that in the next 15 or 20 years Western Australia might become a capital generating area in its own right. I believe it will. But some attention has to be paid to the existing capital generating centres of Australia which at the moment are centered in south-east Australia. We have every right - and I speak now as a Victorian as well as an individual senator - to expect some of the resources of Australia to be deployed in Victoria and New South Wales as well as in Western Australia. What about the gas field in Bass Strait, for example? It could do more, perhaps, to increase the development of power in Australia than any other single thing. We need $250 million for that project but cannot get it.

Yet Senator Willesee is spending his time arguing that the Government should produce $60 million or $70 million forthwith for an unproved project on the Ord River. What for? To grow cotton. Every honorable senator here has heard the story that we have to do something to help the people in the underdeveloped countries of the world. What Senator Willesee is really saying is: Let us grow cotton and take the equivalent in bread out of the mouths of the people in the tropical areas of South East Asia. He is saying that we should not worry about the people of South East Asia. They can grow sugar there. But as we grow sugar in Australia, we do not provide any market for those people. We debated this problem facing South East Asia when we dealt with the Asian Development Bank Bill. This related to the bank which has been set up to help the people living in the wet tropical areas of South East Asia to develop. Senator Willesee argues, on the one hand, that we should help these people develop the wet tropical areas of South East Asia. On the other hand he argues that we should develop the wet tropical areas of Australia. If we do this we will provide no opportunity for these people in South East Asia to trade with us because they can grow nothing else but these primitive crops such as cotton.

The Ord River area has no claim to exclusiveness as the sole cotton growing area of Australia. Cotton of a better quality is growing better in northern New South Wales than it is in the Ord River area at the moment. I am not sold on the fact that the Ord River area can be solely devoted to cotton growing. Other crops may be required.

In the final analysis, this question comes down to the priority of investment in Australia. So far as I am concerned, speaking as a Victorian, when one examines the priority for investment all over Australia the Ord River has a low priority. I suggest that the highest priority in Western Australia is not the Ord River area but the further development of the extractive industries in that State. The conspiracy of senators, such as those who supported Senator Willesee when he raised this matter as one of public importance this afternoon, is nothing more or less than an attempt to force, on the Australian Parliament that which I have heard deprecated from time to time, that which is known in the United States of America as the pork barrel system. What Senator Willesee is advocating is that the Commonwealth should fill the pork barrel of Western Australia to the exclusion of the rights of any other State.

Senator Turnbull, for example, would not listen with any cheer, I suggest, to a suggestion that resources which should be used in Tasmania to develop the Savage River iron ore fields should be reduced in order to produce this exotic development that Senator Willesee is arguing about in relation to the Ord River. That is what he is, in effect, arguing. I am sure mat Senator

Turnbull would not agree with his suggestion. The Commonwealth has spent $4.5 million to put through the Gordon River Road project for the development of the Savage River iron ore fields in Tasmania. With very great generosity senators from New South Wales and Victoria supported this project. But there seems to be a greed developing in Western Australia for Australian resources to be fed into the Western Australian maw, which should be finally resisted. Speaking as a Victorian senator, I am resisting it.

This is not a question for this Senate alone to decide because, when all is said and done, Australia is a Federation. Honorable senators will acknowledge quite freely that the question of how the resources of Australia are to be employed from time to time is the concern, not only of the government of the day, but of the Premiers who meet in conference each year. In the words of Sir Thomas Playford, who was the distinguished Premier of South Australia for many years, the problem facing those attending the various Loan Council meetings each year is to carve up the turkey. When it comes to carving up the turkey in relation to the resources of Australia which are to be employed everywhere, Western Australia is entitled to its share and no more. As one of my colleagues reminds me, Western Australia has been getting more than its share. There has been no whining from this side of the chamber in respect of Western Australia until we came to consider this piece of exotica known as the “ Ord River scheme “. It has now reached a stage where it has become an article of belief that defies logical analysis. The argument that Senator Willesee has put this afternoon can be received by other senators only in the terms which I have stated: That it defies rational analysis of any sort.

I hope that some senator from Queensland will stand in his place before very long and put forward demands for the assistance to which Queensland is justly entitled for the development of the north of that State. I think there is ample evidence to indicate that we can get a quicker return from the employment of scarce resources in Queensland than we can get from their use on the Ord River project. I think that the development of the wet tropics in Queensland and the river systems of Queensland would give a quicker return to the national economy and the national interest than an additional $60 million spent on the Ord River. J suggest that what Senator Willesee has put forward is a spiel, lt is a spiel which would have been quite good for some of the characters 1 remember seeing when 1 was a youth in the back country. They would stand in the local showground and sell broken down fountain pens, hair ribbons or this, that and the other - short in length as far as hair ribbons were concerned, and wilh crossed nibs as far as the pens were concerned. Senator ‘ Willesee is a direct descendant of such types, in my opinion, when he stands in his place and espouses the cause of the Ord River project. He is the early 20th century equivalent of the bloke standing in a local showground trying to sell goods that are no good.

As far as I am concerned, the Ord River scheme is not a project at the present moment. It is not a project on the top priority scale for the development of Australia. I think it has to take its proper place down in the scale of priorities. I think that Queenslanders have a far better case for deployment of Commonwealth resources. I think that Tasmanians have a good case for the use of Commonwealth resources in Tasmania. Honorable senators should not be persuaded that the limited amount of capital that is available for the development of Australia should be put into the Ord River scheme at this stage. When I say that, I do not care whether the soil is good or bad, or whether the farmers can produce 2,200 lb. of cotton seed to the acre or can produce a certain quantity of lint. The Ord River scheme has to be considered in the light of requirements for development over the whole of that part of Australia which lies north of the Tropic of Capricorn, with due regard being paid to the need for the investment of capital in south-eastern Australia. 1 suggest that Senator Willesee has not made out a case. The Senate should reject his argument.

Senator CANT:
Western Australia

– The Senate has been insulted by reason of the fact that the Government has put up as its spokesman an honorable senator from Victoria who does not believe in the development of Australia, or that Western Australia is part of Australia. Senator Cormack said that he did not believe in exotic develop ment. What is exotic development? It is foreign development. The honorable senator is not unmindful of the use of words. He understands what he is saying when he uses words. When he used those words, he expressed the belief that Western Australia is not part of Australia. Senator Cormack really does not believe in the development of northern Australia. He says that the development of Australia must be uniform. The honorable senator has studied history, and he would know that the greatest development in this country has occurred in the south-eastern corner, to the detriment of the rest of Australia. He wants to continue this uniform development in the south-eastern corner of Australia.

The honorable senator says that he believes in northern development. Of course he believes in northern development - up as far as the Murray River. He believes in the development of the northern part of Victoria. He has spoken about the Snowy Mountains scheme and the irrigation and power that is provided by the scheme. These are of benefit to the northern part of Victoria. That is the kind of northern development that the honorable senator believes in. Senator Cormack has referred to the expenditure of vast sums of money in northern Australia. In a debate in this place only a few months ago I blew apart figures that were put forward as evidence of this Government’s record. As we read the newspapers we see reports of the scramble on the part of combines of companies to avoid expenditure on development of the iron ore resources of northern Australia. What has private investment to do with the commitments of this Government in regard to the development of Australia? The honorable senator spoke about beef roads. I do not want to talk about beef roads now; before this sessional period ends I shall have plenty to say about them. The Government will not want to hear what I shall say about wasteful expenditure on beef roads.

Senator Cormack claims that New South Wales and Victoria are the capital generating States of Australia. If the honorable senator looks at statistics of our export earnings, he will find that Western Australia and Queensland are providing a standard of living for Victoria and New South Wales which they cannot provide for themselves. The neglect of this Government to help drought stricken areas in eastern Australia has a vital bearing on this situation. It is not for the honorable senator from the pocket handkerchief State of Victoria, which one could cycle around before breakfast, to talk about the wide open spaces of Australia.

The honorable senator said that the Ord River scheme is not a project, lt is not a project as far as he is concerned, because he is the spokesman for the Government, which no longer has faith in the development of the Ord or of northern Australia. The whole of Australia is watching the Government’s attitude to the Ord River scheme to determine whether, now that the Government has a majority of 22 in the Parliament, it will expend much on northern development. The Government displayed plenty of anxiety between 1961 and 1963 when it had a majority of only two. But, having hoodwinked the people and having persuaded them to return it with a majority of 22, the Government promptly forgot about this plank in its platform and nothing has been done since. 1 might be wrong, but I claim that Sir William Spooner resigned from the Parliament because of the Government’s attitude to northern development. It was for the same reason that Dr. Patterson resigned from the Northern Division of the Department of National Development.

Senator Henty:

– What rot.

Senator CANT:

– Let the Minister rise and reply to that statement. He will have an opportunity to do so later. I believe that what I have said is correct. I believe that the Deputy Director of the Northern Division of the Department of National Development requested a transfer to the Bureau of Agricultural Economics for the same reason. The Government must find an answer to these charges.

The Government started the Ord River scheme in !958. It offered Western Australia a grant of £24 million, or $5 million. Later, as an election bait, it increased the grant from £2i million to £5 million, the money to be spent on projects that were to be approved by the Commonwealth Government. One of the projects approved by the Commonwealth was the development of the first stage of the Ord River scheme. This scheme was based on 12 years’ research at the Kimberley Research Station. I agree with Mr. Court when he said that the experiment had to be developed on a farm scale before an application for further assistance from the Commonwealth Government could be made. This work has been done, and the project has been proven to be successful. It is said that Australia’s cotton requirements can be grown at Narrabri and Wee Waa in New South Wales. It would be interesting if the Minister for Customs and Excise (Senator Anderson), who controls the payment of bounties, were to tell us the quantity of cotton that has attracted a plus bonus and the quantity that has attracted a minus bonus. It would be seen that the Narrabri and Wee Waa areas have constantly attracted a minus bonus, whereas cotton grown in the Ord River area has attracted a plus bonus. The Minister for National Development (Mr. Fairbairn) admitted the facts when he said that we would have to export our best cotton and import cotton of inferior quality.

Sir Robert Menzies went up and opened the first stage of the Ord River scheme. He said at that time: “ We are not at the end of something here. We are at the beginning.” I do not know when further development will be undertaken. Subsequently Sir Robert Menzies rejected an application from the Western Australian Government for further funds to develop the project. He rejected it for reasons which embraced the profitability of cotton production, the control of insect pests, and the breakdown of tropical soils with constant use. It is interesting to note that this soil is not put to constant use; only one half of a farm is used in one year and the other half is spelled. No farmer in the Ord River area is using the maximum capacity of his land. Only yesterday in another place the Minister for National Development advanced other reasons for refusing to provide assistance for development of the project. He said: “ We want to know more about cotton growing on the Ord.” How much more does the Government want to know? Is it not satisfied with the two outstanding crops that have been obtained up to date? Will the Government be satisfied if the farmers get another outstanding crop this year? It just goes on ad infinitum. The Minister also said that the Government was not satisfied about the engineering estimates and that it had had officers from the Snowy Mountains Authority up there who had made estimates that were greater than those made by the Western Australian engineers. We have not been given that report, nor have we been given any details of it. Until details are laid on my table or on the table of this Senate, I am not prepared to accept that the Snowy Mountains Authority has made estimates different from the estimates of the Western Australian Government.

The Minister also referred to the yields that were required to compete on the export market. What is worrying the Minister at the present time is that the Americans can swamp the market and we may not be able to sell. He is concerned that the Americans will put their cotton on the market 10 or 12 per cent, cheaper than it is now. He is concerned that Australia would have to subsidise the growing of cotton, which would attract unfavorable comment from the underdeveloped countries. But nevertheless he is not concerned that America is presently putting its cotton on the world market at a subsidised price. If it is good enough for America to do this, it is good enough for us. We follow America in every other way. Why cannot we follow it in this way? Is it not time that we started to have a look at ourselves instead of using excuses to avoid our responsibilities? The Minister went on to talk about overproduction of cotton. I suggest to this Government that cotton may not be the prime crop that is grown on the Ord River, that the residues from the cotton may be more valuable to Australia in the husbandry of the cattle industry than the cotton will ever be, and that finally the cotton will be only a subsidiary to the better use of the by-products of cotton seed.

The Government has shifted ground on several occasions in respect of this project. I noticed in my letterbox yesterday a pamphlet issued by the Department of External Affairs, explaining the Government’s policy in respect of Vietnam and conscription. In view of the number of statements that this Government has made about the Ord River and the development of northern Australia, the number of times that it has shifted ground, and the different excuses that it has made, I suggest that the day is not very far distant when the Government will have to issue a pamphlet to the Australian people on the subject of northern development In order to justify its failure to provide assistance for this part of Australia. The Government encouraged the Western Australian Government to take part in this scheme, and at present the State Government is spending hundreds of thousands of pounds on overcoming the erosion that has been caused by overstocking the catchment area of the Ord River. The Commonwealth Government allows the State Government to continue to expend all of this money on a promise that the Ord River scheme will be gone on with at some time - a promise that may never be fulfilled.

We are not asking for a great amount of money. We are not asking for the £400 million or £460 million that the Snowy Mountains scheme required. We are asking for £2 million or $4 million a year spread over a period of 15 years, and this can even be reduced, because the State Government has offered not to go on with the whole scheme. It has offered not to go on with the housing part and the hydraulics part of the scheme. This would reduce the amount required by the State Government by $16 million. But the Commonwealth Government still will not come to the party, yet it wants the people of Australia to believe that it is interested in northern development. I do not believe that it is and I will not believe that it is until such time as it backs its words with action.

Senator SCOTT:
Western Australia

– I enter this debate because I am a Western Australian, because I, also, have great faith in the future of the Ord River project, and because I do not like the approaches and the accusations that have been made against the Commonwealth Government by the two previous Opposition speakers. They have accused the Commonwealth Government of inactivity on the Ord, and Senator Willesee’s motion is framed on these lines. We know very well that in 1958, when the initial finance of £2.5 million was made available by the Commonwealth for the development of projects north of the 20th parallel in Western Australia, the State of Western Australia, which was then controlled by a Labour Government, put forward projects on which it desired the expenditure to be made. These did not, of course, include the

Ord River. The State Government asked, first, that a sum of money be made available for the construction of a port near Derby, known as Black Rock; secondly, that a sum of money be made available for other port facilities at Wyndham; and, thirdly, that further finance be made available for a deep water port at Napier-Broome Bay.

Senator WILLESEE:
WESTERN AUSTRALIA · ALP

– In what year was that?

Senator SCOTT:

– In 1958.

Senator Willesee:

– The original ones were put up in 1951.

Senator SCOTT:

– I am talking about 1958, when the first amount of £2.5 million was made available by the Commonwealth as a gift to the Western Australian Government for the development of the northern part of Western Australia, to be expended on projects submitted by the State Government which had to meet the approval of the Commonwealth. The first three projects outlined by the State Labour Government did not include the Ord project at all, although the Kimberly Research Station had been functioning then for more than 12 years, and the Commonwealth and State Governments were finding money annually on a 50/50 basis to enable the Station to carry out research projects on the Ord River. It started in 1947. In 1958 the Commonwealth said to Western Australia: “ Here is £2.5 million as a gift. Will you please nominate the projects on which you want this money to be spent? “ And what did the great Labour Government of Western Australia say?

Senator Benn:

– “ Thank you “.

Senator SCOTT:

– It said: “Thank you very much, but we are not too sure about the Ord River scheme. We would like this money to be spent at Black Rock, near Derby, at Napier-Broome Bay, and on port facilities at Wyndham.” There was not a mention of the 12½ years of research work by the Kimberley Research Station in the Ord area on an irrigation project. This is true. Honorable senators may read the debates. In fact, it was mentioned by a Labour member in another place. He said -

The Western Australian Grant (Northern Development) Act of 1958 provides -

The State may request the Commonwealth to approve … a project in relation to the development of the northern part of the State, and the Treasurer may . . . approve the project on behalf of the Commonwealth.

He went on to say - and this is true -

It also provides -

The Treasurer shall exercise his powers under the last preceding sub-section with a view to ensuring that moneys are provided under this Act only in relation to projects which he is satisfied will contribute to the development of the northern part of the State. . . .

It was not until the defeat of the State Labour Government in Western Australia that any approaches were made to the Commonwealth to have part of this money spent on the construction of a diversion dam on the Ord. These approaches were made in the latter part of 1959 or the early part of 1960. The State Government said: “We do not want this deep water port at Black Rock as was suggested by the Labour Government because in the monsoonal season the town site will be under water “. Honorable senators will remember that the project was to move the town of Derby to Black Rock.

The port facilities that this great State Labour Government wanted would have cost in the vicinity of £4 million. I remember making a speech on this matter and getting out some statistics.I found that after spending £4 million on the development of the deep water port the gross tonnage handled annually would have been less than 8,000. I do not want to hear Labour senators in this chamber accusing the Government of a lack of vision in relation to northern development because when the State Labour Government was given the opportunity of a grant of £2½ million it suggested the money be spent on a project such as a deep water port at Black Rock which would have been completely useless.

I believe that the Ord River scheme has a future. I am not against it. In factI have always sponsored it.I believe that we. as Australians, whether Labour or Government supporters, have a duty to voice our views. But everything cannot be done at once.

Senator Benn:

– Tell us about Mount Tom Price.

Senator SCOTT:

– That has nothing to do with the Ord. The honorable senator might want to talk about iron ore or something else but I am talking about the Ord now. I believe that this scheme will be completed in good time because, as Senator Willesee and Senator Cant have said, the statistics prove that the growing of cotton on the Ord is an economic proposition. This has been proved to my satisfaction. Evidently it has been proved to the satisfaction of honorable senators opposite, and eventually no doubt Western Australia will have the Ord River scheme.

We must realise that this Government has done more for northern development since it has been in office than have all previous Australian Governments put together. Opposition senators have criticised the Government. Let me remind them that there was a Labour Government in office in Western Australia from 1953 until it was defeated in 1959. 1 challenge the two honorable senators I have mentioned or any other honorable senator opposite to name one project to the value of £1 million that the State Labour Government started or even encouraged in its six years reign. I notice that honorable senators opposite are silent. The new State Government came into office in 1959 and I could name projects that it has started, with the Commonwealth’s help, of a value in excess of £500 million.

The Commonwealth Government has encouraged development all over Australia from the iron ore and bauxite deposits in the north to the establishment of new ports at Derby and Wyndham. All this has been done with Commonwealth funds. We are interested in northern development. I should like honorable senators opposite who are following me in the debate to mention any projects of a developmental nature in the north of Australia that the Labour Government commenced during its terms of office prior to 1949. We know that the Labour Party has done very little. We know that it gets on the bandwagon at every election, and we know that we are approaching an election now. As usual, the Labour Party is hopping on the bandwagon of northern development.

During the last election campaign Mr. Calwell, the Leader of the Labour Party, told the people of Western Australia what he would do about northern development if Labour were elected. He was asked what he would do about irrigation in the north and he replied: “We will dam the rivers in northern Australia “. When he was asked which rivers he would dam he stumbled because he could not remember the name of one of them, so he said: “ We will dam all the rivers “. That is Labour’s story of northern development. I am confident that is the kind of stuff the Labour Party will put forward during the next Federal election campaign and when it is asked the same questions it will give the same answers.

Senator Mulvihill:

– What about the Snowy Mountains scheme? Is that not a monument to the Labour Government?

Senator SCOTT:

– Is Labour still talking about the Snowy scheme? I admit Labour had thoughts on it. I admit it was one of Labour’s dreams, but who built it? The Government which I support really started to build it and is continuing to build it. I congratulate the Labour Government for making some kind of a start on the job but when we took office what did we find? The Labour Government was trying to build the Eucumbene Dam, I think it was, under the old day labour system. Do honorable senators know that it took the Minister for National Development two years to convince the then New South Wales Labour Premier - the State Government had the contract for the construction of the Eucumbene Dam - that the dam could not possibly be completed in time to meet the development of the first hydro-electric system, which was to be put into operation at Munyang?

Senator McManus:

– Who built the Opera House?

Senator SCOTT:

– That is another one. But I do not want to talk about the Opera House; I want to get back to the Ord and talk about things that are vital to Australia. I do not want to talk about Labour’s policy of not wearing out any shovels under the day labour system on the construction of the Eucumbene Dam. If honorable senators opposite want me to mention something that a Labour Government did, let me mention the Keepit Dam.

Senator Willesee:

– The honorable senator said Labour did not build anything.

Senator SCOTT:

– The Keepit Dam was built during the war by day labour and it cost four times as much as it should have cost. I am talking now about the wonderful Labour Party whose representatives sit in this place. I say to honorable senators opposite that in my opinion Labour’s efforts in the field of national development became outdated long ago because Labour has a policy of employing clay labour, and large projects cannot be completed with day labour. That is how the Keepit Dam was built, that is how Labour tried to build the Eucumbene Dam and that is how Labour would have tried to complete the Snowy scheme. 1 come back to my original statement, namely, that I believe that the Ord River scheme is one of the schemes on which the Government should make an early decision. I believe it is economically sound and that the sooner we start on the scheme proper the better it will be for the Australian economy.

Senator DITTMER:
Queensland

– 1 listened with interest to Senator Scott, for whom I have a great regard. He told a very interesting story about some of the ports in Western Australia. He did not tell us much about the Ord River scheme, except that he said that he had great faith in it. In passing, he claimed that the Labour Party is talking about developmental projects because an election campaign is under way at the present time. It is interesting to note that he does not face an election for nearly five years. He may have a different opinion on the urgency of the need to proceed with the construction of the major dam in the Ord River scheme when the time of his election comes closer. Peculiarly enough, on occasions he finds that selfinterest is a spur; but on this occasion he does not. I thought that with his multifarious interests and his background he would have enlightened us on the justification for the Government’s procrastinatory approach to the Ord River scheme. But he gave us no evidence that he knew anything about it at all. He certainly gave us no evidence that he is interested in his own State.

Senator Cormack, whom I regard as a friend, showed interest in the rights of the southern part of Australia compared with those of the northern part of Australia. I noticed that Senator Scott also spent quite a bit of time dealing with the Western Australian Labour Government. Apparently what he said about it is the only evidence that he has to justify the Commonwealth Government not proceeding with the Ord River scheme. The only evidence he produced was that the Western Australian Labour Government did not submit to the Federal Government an application for money to spend on- the scheme. That does not justify the Commonwealth Government not proceeding with the scheme. Senator Scott is interjecting. I suggest that he analyse the report of his speech tomorrow, although it will have been improved by the “ Hansard “ reporters. He did not try to justify the Government that he supports or its immediate predecessor of which he was a not so distinguished supporter. Under the present Government he has been elevated. The Commonwealth has provided $12.2 million for this scheme with which it does not intend to proceed now, and perhaps never will proceed with it. Senator Scott says that he has great faith in the scheme, but not just now. 1 do not know when his faith in it will be sufficient to justify proceeding with it.

Surely no-one can say that a great amount of work has not been done on this scheme. Before I proceed to detail, in no small measure in the brief time that is available to me, the story of the preliminary investigations and research associated with the scheme, I wish to deal with a few of the remarks made by my friend, Senator Cormack. On occasions he can rise to heights; but this afternoon I was disappointed in him, particularly in the early part of his speech in which he was very parochial. He dealt with the south of Australia and talked about what the north of Australia had received. Surely he does not want me to blame previous anti-Labour Federal governments for their callous disregard of the north compared with their molly-coddling of the south. He mentioned the loan that the Commonwealth Government made to Queensland for the rebuilding of the Collinsville-Townsville-Mount Isa railway line. Originally the loan was estimated at $40 million. Incidentally, the necessary legislation was passed by this chamber only two nights before it rose prior to the 1961 Federal election. At that time some members of the Government parties were beginning to fear for the tenure of their seats. I point out that it was a Queensland Labour Government led by Senator Gair - I concede this to him - which made the first representations for the loan. Only the muddling of the Nicklin Government and the non-co-operation of the Menzies Government delayed the reconstruction of the line.

It is interesting to recall the differing approaches adopted by the Menzies Government to necessary developmental projects in Queensland and similar projects in the south. The Mount lsa railway loan was repayable over 20 years at a comparatively high rate of interest. The £10 million for the standardisation of the railway line between Albury and Melbourne was provided by the Commonwealth on the following basis: 70 per cent, was provided by way of direct grant for the benefit of New South Wales and Victoria, and 30 per cent, was provided by way of loan repayable - 15 per cent, by New South Wales and 15 per cent, by Victoria - over 50 years at a lower rate of interest. Railway work is being carried out in South Australia on the basis of 70 per cent, being provided by the Commonwealth Government by way of grant and 30 per cent, being provided by way of loan repayable over 50 years. In regard to the standardisation of the Kwinana-Kalgoorlie railway line, the original estimated cost was just over £42 million. The present estimate is more than £45 million. Of the total cost, £14 million was to be provided by the Commonwealth Government by way of grant and the balance of £28 million, or more if required, was to be provided over the years in the form of special grants to the Western Australia Government. Yet Senator Cormack had the temerity to attack what was given to Queensland. 1 admit that more than £7 million has been provided for beef roads in Queensland. The Menzies Government thought so little of the previous Minister for National Development, and evidently of the present Minister, that it vested the control of the expenditure on beef roads in the Treasurer and not in the Minister for National Development. That does not show any great regard for either Minister for National Development. Even the present Minister cannot be held in high esteem if that attitude is adopted by his Cabinet colleagues. I mention in passing that it was on the last night of the 1961 parliamentary session, and again just prior to the election when some of the Queensland members of the anti-Labour parties were doubtful about holding their seats, that the first grant was passed for beef roads in Queensland. A total of £1 million was provided for these roads - £350,000 by the Queensland Government and £650,000 by the Federal Government. I concede that that was a grant. Only in respect of beef roads has there been a Federal grant to Queensland except for a miserable £100,000 for development of the Gladstone harbour. At that time even I could see how futile were the efforts of the Federal Government and the Nicklin Government in respect of the beef roads scheme.

Incidentally, the scheme was not originated by the Menzies Government or the Nicklin Government. The Chifley Government passed the States Grants (Encouragement of Meat Production) Act in 1949. The amount provided at that time was £l million. If that Government had not been defeated as a result of misrepresentation by the mechanism utilised by the anti-Labour forces, it would have given further grants for the encouragement of beef production. The grants were to provide roads, watering places, yards and other facilities necessary to increase beef production, but it took successive Menzies Governments 12 years to see the way that had been pointed out by the Chifley Government. I said at the time that it was a miserable approach; that the road from Normanton to Julia Creek could not possibly be completed for £1 million. I suggested that it would have to be sealed. Subsequently it was necessary to seal it. Although the road is to run approximately 300 miles and it is nearly five years since the scheme was introduced, it is not yet completed. Over £3 million has been spent on it.

I turn now to the Ord River scheme. If 1 have the time, I will deal further with the parochial approach of honorable senators opposite and the almost callous disregard of the rights of the north as exhibited constantly by successive anti-Labour Federal Governments. I could dilate considerably on the justification for the expenditure of money on the north, particularly in my home State of Queensland, but as everyone knows, I adopt constantly an Australia wide approach to problems. I am never insular in my attitude to any particular project. That is why I am happy to associ’ate myself with arguments as to why work should proceed further on the Ord River scheme.

Has the Government been so neglectful that it has wasted £6,100,000? Surely not. Will the Government leave the settlers on the Ord just as a small isolated community who, through their isolation, ultimately will probably drift from the area if left as they are? Kununurra will become a derelict town. In 1946 a Commonwealth Scientific and Industrial Research Organisation experimental station was established at Ivanhoe. For 12 years men with a vocation devoted their lives to research projects there. They learned that in that isolated area there were 150,000 acres of good soil and 50,000 acres of marginal land, all eminently suitable for irrigation. They knew that the water would be available if a dam were built at Nathan Gorge, or the first weir at Bandicoot Bar. They wanted to know what the soil could grow. They experimented with cotton, linseed, sorghum, safflower, sunflower and various other crops, most of which did particularly well. In their experimental plots, they were able to achieve production of up to 4,000 lb. of seed cotton an acre.

We will admit that the farmers on the Ord River scheme at present have not been able to approach that result. I think that, in the first year, crops of between 1,350 lb. and 1,500 lb. of seed cotton an acre were grown. The last harvesting produced about 2,000 lb. of seed cotton an acre. The farmers seem to be in no doubt that they will be able to achieve crops of between 2,500 lb. and 3,000 lb. of seed cotton an acre. With improved care and greater experience, they may even achieve better results. As has been mentioned, not only is cotton produced, but a by-product of high protein content serves the cattle industry in the area. This by-product can make a substantial contribution to the cattle industry.

Everyone knows that the future of the north lies in no small measure in pastoral pursuits. The disabilities of northern areas to be taken into account are isolation, high transport costs - including charges by the Federal Government and by the Queensland Country Party and Liberal Government in the case of Queensland. All these disabilities have to be considered, as the Leader of the Government in the Senate (Senator Henty) knows, when facing up to developmental projects. It has been estimated that five times the volume of water flows down the Ord as flows down the Murray. Yet the Commonwealth Government has been prepared to spend £6,100,000 and to allow the Western Australian Government to spend £2 million-

The DEPUTY PRESIDENT (Senator Drake-Brockman)__ Order! The honorable senator’s time has expired.

Senator MORRIS:
Queensland

.- I do not think any honorable senator or anybody who knows me will deny that I am very keen on the development of northern Australia, and have been so for many years. I think I have demonstrated my enthusiasm, not only by my personal actions, but in a great number of speeches I have made in this chamber. My interest does not lie only in Queensland, the State I represent. I am interested in the development of the whole of Australia, and especially the northern parts. As the matter we are discussing is concerned, first, with the development of the Ord River area, I will refer to that scheme right from the start. I have read everything I have been able to obtain that deals with investigation of the Ord River project. I believe that the Commonwealth Government has done very good work in leading up to the further development of that area. I am not at all ashamed to acknowledge that I am one of the keenest supporters of the Ord River scheme. I will be delighted when we can achieve the development we desire. However, I am realist enough to acknowledge that any government that is asked to spend millions of pounds has a great responsibility to the taxpayers. That responsibility is to carry out a thorough investigation before spending huge sums of money.

It seems to me to be altogether unreal that any Parliament or group of people in a Parliament should be critical of a government for taking natural and desirable care before the expenditure of a lot of money. It was said last year that sufficient work had been done on the scheme to prove it. I do not think any honorable senator or any member of the other place believed that sufficient work had been done at that stage to prove the economy of the operation. I believe that in this month and possibly next month the results which are rapidly coming to hand will conclude the matter. My belief is that we will then see action. Indeed, I think that was implicit in the statement made yesterday in the other place by the Minister for National Development (Mr. Fairbairn).

As I am interested in northern development, I deplore the attempts made all too frequently to make the subject a political football. By doing so, the critics are rendering the greatest disservice possible to the objective that they pretend to sponsor. Some of the comments that have been made in this debate by honorable senators opposite are too ridiculous for words. I think the honorable senators who made these statements realise, or will realise when they see in print the things they have said, that they have been most extravagent in their statements. For example, Senator Willesee said when he raised this subject for discussion, that the Government had no intention to move on northern development. I say in all friendliness that that is utterly untrue. I cannot for a moment believe that the honorable senator does not know that it is untrue. I therefore question his sincerity in bringing forward a motion such as the one we are now discussing. He makes statements that can be demonstrated to be incorrect. He also said that this Government will not on any consideration face up to northern development. We should ‘ examine that statement and recognise, first of all, that there is a fundamental difference between the approach of members of the Labour Opposition and the approach of the Government to this question. Members of the Labour Party, having no responsibility in the matter and recognising that their party has no hope of having that responsibility for many years to come - they are as fully aware as we are of the judgment of the people in regard to their inability - make extravagant and unjustifiable statements.

I have not the figures at my fingertips, but I do not think even a member of the Opposition would deny that in the period during which this Government has been in office it has spent from five to ten times as much per year on the Northern Territory as was ever spent by any preceding Labour Government. And, of course, the Northern Territory is part of the north. The fact that investigations are still proceeding in the Ord

River area does not demonstrate that the Government has no intention of going any further with that project. When I first came into this chamber - having come from the north I knew a little bit about the production of sugar - much was being said about the possibility of growing sugar cane in the Ord district. Indeed, an investigation was held and many members of the Labour Party loudly proclaimed the desirability of moving into the Ord area for the production of sugar. That is an illustration of the Opposition’s utter inability to look at these things from a reasonable and economic point of view. Let us suppose for a moment that the Government has been foolish enough to take the advice of the Opposition in that case: Many thousands of pounds would have been spent on the initiation of sugar production in that area to the great detriment of the people concerned and of the industry itself.

Time does not allow me to deal with many matters, but there is one to which I must refer, as it has been mentioned before in this chamber and has been quite misrepresented. I am speaking of the reconditioning of the Mount Isa railway and I will give the facts of this matter. That railway was reconditioned by the Queensland Railways Department and most of the money required was provided by the Commonwealth by way of loan. It is true that certain railways in Victoria, South Australia and Western Australia have been constructed with money the greater proportion of which has been a grant from the Commonwealth, but the point that is never mentioned by our opponents when this subject is under discussion is that the money provided by the Commonwealth for the reconditioning of the Mount Isa railway was made available in the belief that it would enable Mount Isa Mines Ltd. to enlarge its production enormously. In fact, the income from the increased freight paid by the company is paying off the cost of the reconstruction. So, in the end result, this is not expenditure out of the pocket of the Queensland Treasury at all. Those are the facts and however red in the face Senator Dittmer, who is interjecting, may get, he knows they are the facts. It troubles me to think that any one would come into this chamber and not tell the full story, but only half of it, in a matter like this. Those are the facts. Certainly there was some delay in finalising of the provision of the money to the Queensland Government but, in the end result, the money loaned by the Commonwealth Government to the Queensland Government is being repaid out of additional revenue which could not have been earned but for the reconditioning of that line. Ultimately the Queensland Railways Department and the Treasury of Queensland will be in pocket as the result of the reconditioning. That is the story of Mount Isa.

Realising that 1 have only a short time left in which to speak I repeat that, as a Queenslander, I am very anxious to see the north developed. Only a few days ago I prepared a quite lengthy paper relating to the new rural credit arrangements in the hope that I would be able to speak on that subject in this chamber, but unfortunately that will not be possible this week. In that paper I have set out my proposals for the further development of north Queensland. In the last 12 months fantastic development has been taking place in north Queensland, and particularly on the wet coast. This development is being financed by private money, largely because of facilities being provided by the Commonwealth Government in the form of beef roads and various other ancillary aids. It is my hope that during the next Budget debate I will be able to give some details of the development to which T have referred. It is, perhaps, unknown to anybody else in the chamber at the present time, but it is the type of development that I have for many years longed to see and I am delighted that it is now taking place. I want to see the whole sweep of northern Australia developed and I hope that in the very near future further development of the Ord area will also be put in hand.

Senator TANGNEY:
Western Australia

– Of all the matters that have come before the Senate for debate, the one which I think is of the greatest national importance and should permit debate on a national level, free of interstate jealousies and rivalries and all party bitterness, is the development of the Ord River area, and similar schemes in the north of Western Australia. Those who do not belong to that State and who have not visited its far northern parts can hardly conceive why such terrific importance is attached to this subject by the people of that State. During the war years,

Western Australia was faced with great problems, particularly in its north west, because that was one part of the Australian continent which felt the full impact of the war with Japan. Men, women and children died in the far north west of Western Australia and great lip service has been paid to that area because of what happened there during the war years. I have visited the area several times since the war and have been pleased with the progress now being made in north western development. This is a matter on which all political parties in this House should be united.

It seems to me ironical that this request for further assistance for the Ord River scheme which has come from a State Liberal-Country Party Government to the Federal Liberal-Country Party Government, and which is engendering so much heat in this chamber, should be so summarily put aside by the Commonwealth as a matter for future discussion and consideration. 1 do not want to decry in any way what has been done by postwar Governments in the development of the north west of Australia or of the north generally. No Government worth its salt could have done less. We were obliged to do it because after all this is a National Parliament. For the life of me I cannot understand why a senator of the calibre of Senator Cormack should come into this chamber and describe the Ord River project as a spiel or a bill of goods that is no good. That does not do justice either to Senator Cormack or to the dignity of the Senate.

A few years ago when Her Majesty the Queen visited Australia she was taken on a visit to Kununurra and the Ord River project, which was regarded as one of the great showpieces that Australia had to offer. As has been mentioned by Senator Willesee, the Prime Minister of the day, Sir Robert Menzies, stated that it was not the end of the project; it was but the beginning. They were very good words but, unfortunately, they have not been borne out by the facts. We have been told now that the Government is becoming very cautious about further expenditure on this project, despite the fact that $13 million has already been spent on it. The time for caution was before the expenditure was incurred. It is noteworthy that the Government of Western Australia is not seeking to expend the remainder of the original estimate of the cost of this project in one lump sum. It is asking that $4 million a year be spent over the next 13 or 14 years to complete the project.

To us as individuals $4 million is a terrific amount, but in terms of Government expenditure it is very little, particularly when one realises that since the last war, on a conservative estimate we have spent $6,400 million on defence. We have comparatively little to show for the expenditure of this vast amount of money. One of the most important elements in the defence of this country is development of the northern area, with people working happily there. If this is done, the northern area of Australia will no longer be the liability that it was during the last war.

We have been told that three matters have to be considered before the Ord River project can be completed. The first is that it has to be proved that the Ord can be developed as a cotton growing proposition. That has already been done. It has been proved that cotton can be grown beyond the limits that were originally set down. Now we have been told that there are a lot of weeds growing in the area which require further study and eradication. Quite recently some farmers on the Ord decided to bring down by air natives from the Northern Territory for a period of six weeks in order that they might help to clear out the weeds from the crops. The farmers were to keep the natives for that period, pay them a fairly good rate of pay and then return them to the Northern Territory. They were to do this so that this year’s crop could be cleared of weeds and harvested much more quickly.

The farmers who are working on the Ord have taken their families there. It is a terrific problem to be removed so far from the larger centres of population. But they have gone to the Ord in the hope that the Government will keep its word and provide further money for the development of this project. For the life of me I cannot see what other proof the Government wants before its proceeds with the project and honours the undertaking which it has already given to the Western Australian Government. The Minister for Industrial Development in Western Australia, in a television interview recently, stated that he had no reason to believe that the decision of the Commonwealth Government on the

Ord River scheme was based on fact. He simply could not understand the procrastination by the Commonwealth Government. Every possible proof that had been demanded by the Commonwealth Government had been furnished by the State authorities. That is why we say that the Ord River project is a matter of urgency. Unless the money is forthcoming, the whole scheme could be put back a further 12 months, if not longer. It has already been proved that the growing of cotton on the Ord is an economic proposition. We bring this matter before the Senate this afternoon because other industries could be helped by the furtherance and completion of this project. The development of coarse grains would help the cattle industry, which is also a vital industry in this area.

This afternoon we have heard what the State Labour Government has or has not done and what somebody else has or has not done. I would like to point out that the Commonwealth Scientific and Industrial Research Organisation, acting in concert with the State Labour Government and at its request, established a trial experimental station on the Ord. A great deal was done to encourage the growing on the Ord of cotton and other crops as a commercial proposition and also as a means to help open up this vast area. At that time nobody dreamed of the great mineral resources which would be found further down towards North West Cape and which have led to the population explosion that is taking place in the north at the present time. But we cannot keep the people in these areas unless they are provided with a few decent amenities. For years I have been advocating the fuller development of our natural resources, which are very important to the Commonwealth. This afternoon we should not be speaking about this matter as Queenslanders, Victorians or Western Australians. We should be speaking as Australians because this northern area is of vital importance to the whole nation.

The development of this project is being carried out on the cheap, I should think, considering the way in which money is spent these days. The amount of money that is outstanding is not very great so far as the Commonwealth Government is concerned, but it is so far as the people in the area are concerned. A great deal of confidence in the word of this Government is required to enable the people in the north west of Western Australia to continue with their commitments. In the 66 years of Federation, Labour Governments have been in office for only 17 years. So for nearly 50 years non Labour Governments have been in office. When it comes to the question of deciding where the guilt lies in the development of these remote areas, 1 leave it to honorable senators to come to their own conclusions.

The expense that is involved in this and other similar projects in the development of our northern areas is much too great for the States to bear, particularly Western Australia which has a papulation of less than three-quarters of a million people. The State Government could not possibly provide the money for this project from its own resources. Once this money is expended by the Commonwealth Government on the development of Western Australia, it will be one step further along the road to making Western Australia self sufficient. It will be no longer a claimant State. Senator Cormack said this afternoon that the eastern States are being deprived of some of their wealth in order to assist Western Australia. That will continue, and it must continue if we are to develop Australia as a whole. But the further expenditure in the north west of Western Australia, and in the northern part of Australia generally, is bringing the time much closer when Western Australians will be self supporting and will not have to go cap in hand to the Commonwealth Grants Commission or to expect their wealthier fellow Australians in the eastern States to help them with their projects of national development. I therefore urge the Government to give immediate consideration to this problem in connection with the Ord River project and to see that the promises, which have been made by successive Ministers for National Development, acting as spokesmen for the Government, are carried out immediately in order that the development of the whole country may be achieved as speedily and as efficiently as is possible.

Senator COTTON:
New South Wales

– This discussion has been proposed as a matter of urgency by Senator Willesee. The basic material deals with the failure of the Government to proceed with the next stage in the development of the Ord River irrigation scheme as requested by the Government of Western Australia. In effect, we are examining three things: Senator Willesee has referred to the failure of the Government to proceed with the scheme. He wants to proceed with the next stage of the work. We also have what is, in effect, a request of the Western Australian Government.

There are a number of considerations involved and unfortunately this is part of a larger picture of which time will not permit discussion this afternoon. First of all, let us consider the national responsibility involved. I am in great sympathy with Senator Willesee and those honorable senators of the Opposition who spoke about this matter this afternoon. These matters of development projects, State by State, are of real importance. They mean a lot to the people of the State concerned and, in the end, they mean a lot to the people of Australia, lt is quite proper for any honorable senator. I suggest, to raise issues of genuine development projects in their respective States, lt is our function as senators to do so. It is our function also,’ in this place, as a Commonwealth Parliament, to act in the best interests of Australia as a whole. This is where some of tha personal and State problems come into conflict with the broader issues and the broader needs of the Australian people. These are always hard decisions to make. But someone has to make them and in making them the State Governments must have, and do have, a very important part. This is part of the Federal system. State responsibilities lie in certain areas of action and cover large parts of our resources. The Commonwealth, on the other hand, has certain decision making areas and also has command over substantial resources, some of which are financial.

One of the first things we need in such projects is consultation as well as cooperation from State Governments. It does not really achieve any great purpose in the end for the Commonwealth and State Governments to be in conflict over development projects. In the end that does not produce any real result. Such action might achieve some emotional relief but not necessarily any results. The Commonwealth has fundamental national responsibilities as the

National Parliament. This has to be accepted, It also has a financial responsibility because it has the burden of levying taxes to finance projects of this kind. In the end, the Commonwealth Government can be dismissed from office if its tax burdens are excessive or are not wisely levied. So it has a responsibility in its own house which is of great consequence to it.

One of the things I have always been very vexed about when considering this national development picture has been the evaluation of the various projects throughout Australia. I think we all accept the fact that Australia is a country which is crying out for development. This is what I believe in- and I think every honorable senator believes in it. There is a tremendous problem, on the other hand, as to who will evaluate the prospects of development projects and who will set them out in order of priority. This would not be an easy task for any person or group of persons but in the end somebody must make some sort of determination of the priority that development projects should have. This has never been done.

I understand that one of the difficulties in this connection has been a failure to get the State Governments, State by State, and the Commonwealth Government to agree to an assessment of all development projects and to agree to a priority for them. We all understand how hard this would be. But there have been recent heartening examples of this in relation to national development. I refer to such things as the Australian Forestry Council, in which the Commonwealth and the States have got together and have assessed the problems of forestry and have set out a programme. This sort of action is beginning to be applied to water resources. What I hope for is that in the end we will see some conscious assessment of the development projects that we in Australia would like to engage in, State by State, together with the Commonwealth, and that some bona fide attempt will be made to evaluate them for their worth at the particular point of time they might be undertaken. All honorable senators want to see these development projects undertaken. I, for my part, would like to see many things done in New South

Wales much more quickly. The same would apply to other senators and their respective States.

We can run only at a certain speed in this regard. The number of development projects available to us is greatly in excess of our two resources for this purpose. I refer to the resources we have as far as manpower is concerned, and to our capital resources. The first of our capital resources consists of the savings of the Australian people which they accumulate by depriving themselves of some degree of living standard. They put money into a savings bank to buy a house, to accumulate Commonwealth bonds, or to save against a rainy day. But there is a second kind of saving. 1 refer to the level of taxation that the people are prepared to submit to, not to finance current investment, but to finance developmental expenditure. As all honorable senators know, the Commonwealth is providing some expenditure of a capital nature out of revenue. That is something I believe in. Therefore the willingness of the Australian people to save in a voluntary form and through taxation amounts to a great deal in the provision of funds for development projects. But there are fixed limits to what the people will do. Then there is capital that can be generated from overseas. Many people argue about this. Many people on the Opposition side of the chamber who are not present just now have argued strongly against overseas capital. Subsequently, they have argued in favour of development. One cannot really have development without resources and I am afraid that overseas capital constitutes a part of the necessary resources.

There is one factor involved in this development project we are discussing which no honorable senator has bothered to speak about. If the Western Australian Government is so keen about this project, and is so convinced that it will work, why has nobody, so far as I am aware, made an attempt to get the thing off the ground with local finance? Why has nobody bothered to look at this project? There has been no consortium of local enterprise so convinced of the economics of this scheme that it has made a proposition to develop it. Perhaps this has not been thought of. Perhaps it has been thought of, but not agreed to.

Senator Prowse:

– Has it been done anywhere?

Senator COTTON:

– 1 do not know. I do not know of an instance. This does not mean that it should not be done. I see no reason at all why private enterprise cannot be permitted to examine the prospects of agricultural development just as it has examined the development of iron ore. If projects are attractive enough for an investor, then, as a general rule, somebody gets an idea about them and starts trying to do something. If they are not attractive enough for somebody to do something privately, or if the State Government concerned passes them to the Commonwealth Government, then one has to look at them a bit more carefully to be sure that we are not being left with an unpayable operation.

So far as I am concerned I am not familiar with the Ord River scheme. I would like to go to the area. 1 have not been there but plan to go. It has captured my imagination because I have read of it. I understand that $8 million has been spent already on the scheme, of which the Commonwealth provided $6 million. That money has produced a certain stage in the operation. It is possible to look at the scheme and to see a curtain level of ability to perform a useful task. At this stage it is possible to evaluate what has been done and what needs to be done. That is my understanding of the position. The next stage of the work calls for $70 million. That is not a huge sum of money if the project is viable. A figure of $4 million a year certainly is not excessive if the project is worth going on with, whether now or later. I do not think the money considerations are the dominant ones. There are other considerations such as how the scheme rates in the development scale when considered along with what it might do, not only for Western Australia but for the Australian people. 1 suggest at this stage that it is hardly fair to condemn the Commonwealth Government for its decision to pause for a while on this project, lt did this, I am quite sure, it would be in order to sort out the situation more clearly. The Commonwealth Government probably wanted to see the results of the development of the larger acreages of crops which have been produced in the last two or three years. It has been said - and

I can only take the authority of the Minister concerned for this - that with the present available water from the Ord River, caused by the construction of the present diversion dam, together with the water available in the cotton growing area of the Namoi River in New South Wales, Australia now has reached a state of self-sufficiency in cotton production. What we are really talking about now is the possibility that, with the new headworks proposed on the Ord River, or somewhere else, we would be able to produce cotton for export. That is rather another matter, and it ought to be looked at very critically. We in Australia can produce certain commodities for export without the payment of a subsidy. Wool is a case in point, wheat is another, and meat is another still. When we speak of development, it is fascinating to examine the resources that are available and to consider whether they ought to be invested in headworks for irrigation or in pasture improvement. If one is in favour of meat production, as I am, one can make out a case for pasture improvement which looks much better Attn would a case for the provision of headworks for irrigation to grow crops that might well have to be subsidised. I suggest that, although the growing of cotton may look attractive at first glance, we must be very careful about producing what could be described as an unwanted crop on world markets.

Huge problems flow from the payment of agricultural subsidies. People point to America and say: “ Look at what America does “. It is much easier to subsidise agriculture when you have a huge domestic market, a great population and a tremendous industrial complex. Australia’s ability to subsidise agriculture is not nearly as great as that of America. The ratio that America’s export income bears to her product is quite different from ours. Our difficulties are very much greater than those of America. So let us not take the Americans as a guide to the worth of producing crops just for the sake of producing them and of subsidising the producers. The Americans are faced with huge problems arising from surplus production which has been generated by this general kind of thinking which, for want of a better term, we may refer to as a farm support programme. We just cannot afford to induce people to grow things without regard to their ability to sell them on the free world markets. To do this could well make Australia bankrupt, whereas America might be able to come out alive. Recent figures reveal that America holds the following stocks: Wheat, 600 million bushels; feed grains, 55 million tons; rice, 7.7 million cwt.; non-fat dried milk, 17 million lb.; and soybeans, 53 million bushels. I understand that in 1956 approximately 120 years’ supply of cheese was stored in America unsold. So I suggest that we ought to examine carefully any schemes that are put forward for producing crops that have to be sold on the export market.

Existing cotton growing areas in Australia, Including the Ord diversion dam area, can produce enough cotton for our own requirements. So this question arises: Ought we to engage in the construction of more headworks and the provision of more irrigation to produce more cotton to sell on export markets? One of the ways in which this could be tested would be to put the cost of the headworks on the crop and not on the taxpayer. Nobody has done this yet. I repeat that one of the things we could do when assessing development projects which involve the use of water would be to put the cost of the headworks on the crop. Then we would get a very different approach.

Having read his speech, let me say, in fairness to the Minister for National Development, that it would seem that he has given this matter very careful consideration. I should think that he would like to see this scheme move forward in due course. I can find no other indication in what he said. There has been no refusal to proceed, and none is implied in his speech. The Government is looking for more proof before it commits itself to the expenditure of more money. It wants more proof as to costs. That proof is becoming available. It wants more proof in regard to markets. I imagine that information can be obtained. It wants to know more about subsidy payments, because as a body of taxpayers we might become involved. I support the Government’s attitude. As far as I can ascertain, the engineering work has been first class. The design seems to be all right. It seems to be a cheap dam to store the necessary quantity of water. When all is said and done, we should not be building fascinating engineering monuments but headworks to provide water for crops on an economic basis.

Senator Murphy:

– Do we not also want to get people up there?

Senator COTTON:

– In the end, people will go where they find life to be most attractive and payable. What the Opposition is trying to do is to stampede the Government into making a decision before it is in possession of all the facts. I am afraid that I cannot support the Opposition.

Senator BENN:
Queensland

.- We are discussing the failure of the Commonwealth Government to proceed with the next stage of the Ord River irrigation project as requested by the Western Australian Government. The proposal does not require any explanation from me. A cursory reading of the proposal reveals that one stage of the project has been completed and that the Western Australian Government has requested the Commonwealth Government to undertake the second stage. Implicit in the proposal is the refusal of the Commonwealth Government to accept that responsibility. That leads us to look at matters in retrospect. Today, in the year 1966, the Western Australian Government, on bended knees, is asking the Commonwealth Government to proceed with this important project.

If we cast our minds back, we recall that at one period in the history of the Commonwealth the States had the right to float their own loans and to win their loan money in competition wilh one another and with the Commonwealth Government. Then they undertook whatever projects they thought were reasonable in a manner that would allow industry to fit into the general economy of the country. It was not until during the last war that the States yielded their taxing powers to the Commonwealth and uniform taxation was introduced. Today the State Governments are at the mercy of the Commonwealth Government and are forced to ask the Commonwealth to give them money.

Is the Ord River project worthwhile? Has it been tested? Is it economic for the Western Australian Government to grow cotton in the Ord River area? I know of my own knowledge that cotton is grown in the Dawson Valley in Queensland and that transport facilities there are better than in the Ord River area. All these factors have been tested by the Western Australian Government. They were checked by the Commonwealth Government before it advanced a loan to Western Australia. The Western Australian Government, in its simple way, proceeded with the project. A weir was constructed, irrigation drains were constructed, water was laid on to the farms, and, as ( have been informed on many occasions, record crops have been grown. Why has the project not been proceeded with? The settlers have been doing well, but suddenly a full stop has been put to the expansion of the project. No more irrigation has been provided and no additional quantity of cotton has been grown. We all know that if an industry is left to operate in a small way it can easily become uneconomic. If you want to improve the economics of an industry’, you have to expand it.

Sufficient minerals are available in Western Australia to enable a cotton industry, from the growing of the raw cotton to the production of the finished article, to be established. Iron ore is being given away to other countries. I honestly think that that is the pattern that the Commonwealth Government believes in. If it so wished, the Government could ensure that the machinery was provided, that a textile factory was established, and that cotton goods were woven. Perhaps the cotton could be sent to Perth or some other manufacturing centre where it could be treated, but that is not to be done. The Government is not moving any further ahead. Is it any wonder that a senator from Western Australia raises this, subject as a matter of urgent public interest? I rise in sympathy for him and for his State and also because this has become a national matter. When the States yielded their taxing powers to the Commonwealth, after we adopted uniform taxation, the Commonwealth became the sole agent on the loan market for all purposes relating to loan money, so these projects have a national standing, whether they are carried out in Western Australia, in the Australian Capital Territory or in Queensland. I think that the Commonwealth Government believes in a certain form of development. At the present time, it undertakes only development of a simple, easy form.

It gets an Appropriation Bill passed through the Parliament and makes an advance to a State for a certain purpose. That purpose is carried out, but the State has to repay the loan to the Commonwealth and pay interest on the loan while it is completing the project. This is history. It is business, so far as the Commonwealth is concerned. The Government is only the money finding authority in the Commonwealth, and there it leaves the matter. It has not any constructional facilities of its own. It could not dig a posthole in the Australian Capital Territory, lt lends money to the States and to other contracting authorities. This is the easy part. The States have the responsibility, the technicians, the engineers, and. the other highly trained officers to do the constructional work and to see that the project is completed.

The Commonwealth Government loves its posture at the present time in the field of development. Let us consider the word “ development “. We say that we are an underdeveloped country or that we are developing. That connotes, of course, that there is room in Australia for development. Nobody will deny that. It means that we have resources to develop. If we are underdeveloped, there is something to be developed, and I can assure anyone who is listening to me that there are immense resources to be developed in Australia. I also believe that it is proper for the Commonwealth Government itself to stand in the field of development and not to adopt the aloof posture that this Government has adopted, letting the States do all of these things. I know that it has made loans available to the States, for instance, for the pur-‘ pose of constructing beef roads. There, again, we get the picture. The Commonwealth goes to the Treasury, writes out a cheque, and advances credit to the States. The States are the constructing authorities. Main roads officers go out and say whether or not the road will be sealed, and where the drains, bridges and culverts will go. Then what do we get? We get roads constructed that will allow cattle to be brought in on trucks, say from Victoria River Downs across to Alexandria Downs on the Barkly Tableland and to the railway at Mount Isa. From there the cattle are taken to meatworks where they are slaughtered and the meat is processed and exported to the United States of America or some other country that requires meat.

But what about the drought stricken lands throughout Australia? What is the Commonwealth Government to do about those? While we exist we shall have droughts. That is a problem that certainly confronts Australia. We shall be faced with drought, but the Commonwealth Government buries its head. Again, it takes the simple course. It goes to the Treasury, writes out a cheque, and sends money to the Queensland Government or the New South Wales Government to grant relief to the graziers and others who have been seriously affected by the drought. This is just to relieve the financial pressure in individual cases, but the droughts will still go on next year and they will be prolonged. Even when we are granting relief by making distress payments to these people, those in the southern portion of Queensland, in the Goondiwindi district and elsewhere, and in parts of New South Wales are still suffering from the drought. What will the Commonwealth Government do about this? It becomes humorous to hear Government supporters speak of the great interest that the Government has in development.

Let us face the facts. The cotton industry is an important primary industry. I do not want to get too far away from the motion but I should like to make a comparison. The Commonwealth Government is interested in primary production. It is interested in meat, wheat and wool. These things are essential to our economy and our very existence. Is the Commonwealth making any move to dam rivers or to do anything in the way of conservation of fodder? The Commonwealth Scientific and Industrial Research Organisation quite recently discovered by scientific tests just how little food is required to keep a sheep alive. The scientists found that when the sheep was in a starving condition it produced good wool. When they increased its food supply with more protein it grew a fleece weighing 9 or 10 lb. These things have been discovered. The scientists know just how little food a sheep requires to live. That food could have been found last year. There was sufficient wheat, and there was sufficient offal from the peanut silos in Kingaroy and elsewhere. The Government could have got that food.

It could have got fodder from Papua and New Guinea. It could have got other food from New Zealand. It could have got supplies also from Indonesia. It could have obtained sufficient food to keep alive at least 9 million or 10 million sheep throughout the drought, but it failed to do so, and it has no scheme now that is worth endorsing with a word of praise to relieve the pressure from the periodic droughts by which Australia is affected.

If we are to have national development, we must have development on a scale that will allow us to get the utmost from our grazing and arable lands. If the Government cannot achieve that, it should not be permitted to function as a government. Today or tomorrow we shall have before us legislation relating to the making available of a sum of $82 million for banking purposes in Asia. The loans from the bank will be made direct to the governments of countries of Asia. The loans will not be farmed out, as it were, to States to expend as they wish as constructing authorities. It will be done in a different way. These countries will have to undertake their own development work. This is a lengthy subject to cover properly. I can remember that when I was in the Senate a few years ago well informed senators on the Government side assured me and others that the supplies of iron ore in the Commonwealth would last only 20 years or, at the most, 23 years. That appeared to be a fact at the time and they stated what they honestly believe to be correct.

The ACTING DEPUTY PRESIDENT (Senator Wedgwood). - Order! The honorable senator’s time has expired.

Senator MATTNER:
South Australia

– Senator Willesee has moved that the Senate should discuss, as a matter of urgency, the failure of the Government to proceed to the next stage of the Ord River irrigation project as requested by the Western Australian Government. I suppose it is true that one can become very enthusiastic about northern development. I saw the Ord River many times long before there was any thought of developing it as it has been developed in the last few years. I have made frequent visits to the area. I am not one of those people in Australia who become rather starry-eyed about water conservation and the use to which the water can bc placed, irrespective of whether conservation is a financial proposition. lt is quite true, as Senator Willesee said, that for 12 years experimental work was carried on at the Kimberley Research Station. It is most interesting to see the experimental work that was done before a decision was made to build a diversion dam on the Ord at Bandicoot Bar. The decision to build the diversion dam was taken - I suggest this is fair comment - before a true economic assessment of the scheme as a whole was made. For 12 years experiments were conducted which proved that certain things could be grown there but never once was any investigation made into the economic situation and the profitability of the crops. 1 well remember speaking in this place when the diversion dam was mooted and I was most enthusiastic about the proposal. Perhaps I was carried away with enthusiasm but not to the extent that I omitted to raise the question of the profitability of the crops to be grown there. As I have said, the experiments proved that safflower, rice, cotton, linseed and sugar could be grown on the Ord but the profitability of the proposal was never mentioned or even examined.

I would have been very interested to hear from Senator Willesee or from those who followed him in the debate what results have been obtained by farmers who have been placed on these holdings and what costs have been involved, but to my knowledge no honorable senator has given us this information. We knew, even in the experimental stage, that the farmers would have to be subsidised but neither Senator Willesee nor Senator Cant told us the amount involved or how the farmers arrived at their cost of production. No mention has been made of whether the settlers will ever become solvent. I would have liked the honorable senator who raised this subject and honorable senators who have followed him in the debate to supply this information. [ am picturing the area now in my mind’s eye. When 1 saw it in its virgin state it seemed to me to have possibilities. Everything seemed to be favorable for an irrigation scheme. I do not have a great scientific knowledge but I know that when an additional 14 or 16 inches of water, by way of irrigation, is placed on an area of land which is accustomed to an annual rainfall of 16 or 18 inches, the consistency and structure of the soil is changed. That is one factor which has not been investigated to any great extent. What happens to the soil when so much additional water is placed on it? Similar problems arose in relation to the Murray River. As Senator Cormack and other of my colleagues have said, let us not become too emotional about this. It is easy to sell the Ord River project. It is a long way from the centres of population and from a distance the fields look very green, but we must examine the proposal in the light of whether it will become a profitable venture.

The Government has been accused of not being interested in northern development. Let me mention some of the ways in which the Government has shown its interest. For the construction of beef roads the Commonwealth has given $18 million to Queensland, $9 million to Western Australia and $10 million to the Northern Territory. Dealing more specifically with stage 1 of the Ord River project - the construction of the diversion dam at Bandicoot Bar - the Commonwealth has contributed $12 million as well as Si million for the research work which was done. Why did the Commonwealth contribute $1 million for research? To make this scheme go, if it is humanly possible to do so. It is just not true to say that we are not interested.

Let me mention the development of the brigalow land in Queensland. I have not seen the area since the developmental work began but after earlier visits I have wondered about the possibilities of development because brigalow is a legume. A loan of $15 million has been made to Queensland to enable it to carry out this work and an additional $11 million has been approved for the second stage. Senator Wood may not agree with me but J think $14 million was advanced by the Commonwealth for the work that had to be done on the Townsville to Mount Isa railway. The Government has also contributed $3,300,000 for the construction of housing at Weipa. I am interested in what has happened to the ports in north-western Australia. Let us bear in mind what the Ord River scheme has done not only for the port at Wyndham but also for the new township which has been built. Roads in the area have been improved making transport possible to Kununurra. If the true story were told of what this Government has done, is doing and will continue to do I am sure everyone would say: “This Government is vitally interested in making funds available to speed up the development of the north.”

I was interested in Senator Cant’s reference to Victoria and the southern States generally. He referred to Victoria as being a pocket handkerchief State that one could easily ride around on a bicycle. That may be true, but never let it be forgotten that the taxes paid by the people in those pocket handkerchief States have made it possible for the north to be developed. Why should we not develop the south as well? We have never asked the north to contribute one penny for southern development.

Senator Murphy:

– How idiotic that is when the problem confronting the north is the lack of population. Is that the honorable senator’s answer?

Senator MATTNER:

– Exactly. My good friend says: “ How idiotic can you be.” I have often wondered - when I have been listening to him. Let me come back to the point. The north has not given anything to the south for development, but the south has given to the north for development. The people who provide the sinews, as it were, are entitled to some consideration. I want to get back to what has been produced on the Ord River. If I remember correctly, about 25 settlers are growing cotton there at the present time. I hope I will be corrected if I am wrong. I think that number is expected to be stepped up to 34 this year. I would have been very interested if Senator Willesee or any other honorable senator opposite had quoted the returns on the crops.

Senator Willesee:

– -Surely the honorable senator knows that they are highly profitable.

Senator MATTNER:

– They are highly profitable, are they?

Senator Willesee:

– Surely the honorable senator knows that. Senator Scott told him that.

Senator MATTNER:

– All right. But on what basis and at what cost are they highly profitable?

Senator Willesee:

– On the basis of income over expenditure, I would think.

Senator MATTNER:

– All right. We are talking about this matter from an economic point of view. Twenty-five settlers have been put on farms. What has each of them been paid by way of subsidy in order to grow his cotton? That is the interesting point. The first five farmers went to the Ord River in 1964. They were assured by the Western Australian Government of what they could grow. I do not want to be misquoted on these figures. In the first year they produced 448 lb. of raw cotton per acre. When I read these figures I queried them. I was confused because I thought the cotton production was much higher than that. 1 knew that it started off at about 1,400 lb. of cotton seed per acre and then increased to 1,800 lb. per acre. That was really startling as far as I was concerned. Those figures were extraordinarily good. The production has gone as high as 2,900 lb. per acre. The five farmers received 49d. per lb. for their raw cotton. That included a subsidy of 16d. per lb. In 1965-66, 20 farmers planted cotton. They obtained an average of 636 lb. of raw cotton per acre. They sold their cotton at the same price as in the previous year. There is no shadow of doubt that cotton oan be grown on the Ord River if the existing subsidy is continued. That subsidy is about 14d. per lb. The average subsidy paid during the first two years of cropping was £10,134 per farm, or £36 per acre-

The DEPUTY PRESIDENT (Senator Drake-Brockman). - Order! The honorable senator’s time has expired.

Senator MURPHY:
New South Wales

– We are considering a motion moved by Senator Willesee in the following terms -

That the Senate, at its rising, adjourn till Thursday, 12th May, at 10.30 a.m.

He moved that motion to enable the Senate to discuss the following matter -

The failure of the Government to proceed with the next stage of the Ord River irrigation project as requested by the Western Australian Government.

The moving of such a motion, although technical, is a way in which matters of great substance can be brought forward for consideration. This matter illustrates the approaches of the two great political bodies

In this country. On the one hand, the Australian Labour Party says that the Government should make up its mind on this matter. On the other hand, the Government parties say that the Government should not be criticised at all. Broadly, they are the approaches.

What is the background to this debate? We live on the driest continent on earth. The annual rainfall over the whole of Australia is only a fraction of the volume of water that passes through any one of a great number of rivers around the world, such as the Yellow River, the Amazon River and the Mississippi River. So water is Australia’s great problem. For this continent water is life. Our future depends on our harnessing the water resources of this country. A great part of those water resources is in the very area where the Ord River is. If we are to utilise the great part of this continent in the north west, we have to utilise its water. If we cannot harness its water we cannot populate it. Nothing is more certain than that. Yet this Government is fumbling on this Ord River scheme. The Western Australian Government, which is responsible for almost half of this great continent, has investigated this scheme. It wants to proceed with it. It has asked the Federal Government to provide the money for the scheme. The Federal Government is dilly-dallying. It will not say one way or the other. How can private people make up their minds in these circumstances? How can the people who are in the area or the people who want to go there decide what they will do, if the Federal Government cannot make up its own mind? What kind of planning for the future of this country is it when the Government will not even say what it wants to do?

A number of answers have been given by honorable senators opposite. The most extraordinary one was that given by the spokesman for the Government, the man who was selected to answer the case put by Senator Willesee, namely, Senator Cormack. What did he have to say? In substance, he said that the Western Australians are greedy; that we ought to be developing Victoria and not Western Australia; and that it is more economic to develop Victoria. He is speaking about the most densely populated State in Australia. He is prepared to say that we should spend money in that State rather than in the unpopulated areas. We heard an echo of that opinion from the last speaker, Senator Mattner. One might say that he was foolish enough to ask: “What has the north done to develop the south? What has the empty part of this continent done in the form of providing money for the southern part of the continent?” What kind of an answer is that for the people of the Ord River who want to know what their future is? What kind of an answer is it for the Western Australian Government which, after making a request to the Federal Government, repeating that request, backing it up with research and saying that it is prepared to back it up with all its authority and all its resources, wants to know the Federal Government’s decision? But this Government is not prepared to say whether or not it will go on with the scheme.

Senator Cotton:

asked: “Why has not a private consortium come forward to engage in this development? There must be something wrong with the area if a private consortium will not develop it.” That is the outlook of people on the Government side of the chamber. They say that we should have a private consortium. That is what led Australia into its present situation, where we need great national projects, the development of our mineral resources and the development of other great industries. But all that honorable senators opposite can say is: “ Why is there not a private consortium to do these things? “ The answer is that when the Government fails to do anything about these matters a private consortium comes into the field and, almost invariably, that private consortium is either completely controlled or dominated from overseas. The great tragedy of this country is that our development has fallen into the hands of overseas investors through the neglect of the Government. It is continuing to fall more and more into their hands. The inaction of the Government in respect of the Ord River scheme is an illustration of this kind of neglect which will cost Australia very dearly in the future.

The diversion dam has been built on the Ord River. If the Government were responsible, it ought to have investigated the economics of the project before the diversion dam was built. Already $12 million has been spent by the Commonwealth Government on the scheme, lt ought not to have been spent if the Government were not prepared to proceed with the project, lt is of no use to state: “ Look. We investigated the scheme. We were certain that it was all right. Now we find that something has gone wrong. There was a mistake in the calculations.” The Government should have planned properly and should have continued to pursue the course upon which it set out. If the Government is to adopt the attitude that projects can be started and then stopped, it will not only do great damage to the people on the Ord River, but also to other persons who may have contemplated going there, and will shake the confidence of Australians generally in the Government’s willingness to carry through projects once they are commenced. One of the great necessities for the development of a nation is planning. Once plans for development are laid, they should be adhered to unless there is an overwhelming reason for departing from them. How can people, whether individuals, organisations or States, carry on without knowing from one month to another and from one year to another whether the Government will proceed as it indicated it would? Sir Robert Menzies indicated that the diversion dam was only a beginning and the Government would go on and on with the project until it was finished. This is the type of development that is needed by States, by institutions and by the people, lt is the only way we can organise our national development. lt is tragic that men with small and narrow minds dominate the thinking of the Federal Government. The Government is prepared to have its supporters speak as we heard Senator Cormack speak today. Notwithstanding concessions by honorable senators who are intimately acquainted with the project - such as Senator Willesee and Senator Scott - that the Ord River scheme is economically sound, the chief spokesman for the Government said: “ Do not go ahead with it. Let us turn to the south. Let us develop Victoria. Let the north go hang.” This is the approach of the Government. It will not commend itself to the people on the Ord River or to the people of Western Australia. If we tolerate this kind of thinking we will not have the national development we need. We are engaged in projects all over the world, in the sense that we put our own moneys into plans being made by people of other countries for their development. We would not do to other countries under the Colombo Plan or any other plan what we are doing to our own people in Western Australia.

It is a national disgrace that having entered upon a project of the character of the Ord River scheme we should fail to proceed with it. It is even more disgraceful that the Federal Government will not make up its mind and tell the people of Western Australia honestly whether it proposes to proceed with the scheme. I support the proposal put by Senator Willesee.

Senator DAVIDSON:
South Australia

– I come into this debate with considerable interest because I am anxious to add to the arguments that have been advanced by honorable senators on this side of the chamber this afternoon to assure the Senate that the Government, far from taking action that would shake the confidence of the people, as claimed by Senator Murphy, is working through the Ord River project with care and thorough research and with intelligence that will bring credit to itself and benefit the ultimate development of the project. I have visited the Ord River, and like all other people who have been there, I am greatly interested in it and the development proceeding there. I find great interest and excitement in the plans that have been worked out as a start. But the aspect that impressed me, looking at it for the first time, was not only the projects one could see, but the courage and confidence of the Commonwealth and of the people who are prepared to go there to investigate and adventure in the cause of national development and the ultimate cause of Australia. Therefore I join with those honorable senators who have asked the Senate to reject the proposition we have been debating this afternoon.

I question the use of the word “ urgency “ in this connection. What is the urgency? When the Government is examining all the aspects of marketing and development, population, location and everything else relating to the Ord River scheme, and doing it wisely by assembling the information that is sound, it is not possible to act hurriedly, as some people would like the Government to act. 1 am satisfied from my own examination that every step that can be taken in the circumstances is being taken steadily and wisely, and that the ground is being consolidated before the each move is made. For that reason I reject any suggestion of urgency. I similarly reject the word “ failure “. Much has been made of the so called failure. The Government has not failed in the Ord River area. It has been enterprising in assisting and establishing the dam at Kununurra and the related agencies and development there. Every examination for further development has also been undertaken. It cannot in any circumstances be described as failure.

I reject Senator Murphy’s comment that the project has been stopped. It has not been stopped. There is continuing progress and development by the people on the Ord River scheme. There is evidence that cotton yields are increasing. This encourages the Government, but surely as the previous Prime Minister, Sir Robert Menzies, said and the Minister for National Development (Mr. Fairbairn) has said in a current discussion, it is simply not good enough for the Commonwealth to pour out a great sum of money until the total results have been examined. It is not sufficient to spend additional amounts when the only figures before us relate to a few seasons.

This has been a new sphere of operations for the Commonwealth in scientific development and developments of all kinds. The Ord River area has been subjected to intense irrigation. Plants and crops new to the area have been grown there. This has involved a lot of problems, not the least of which have been the deterioration in certain areas of soil, and plagues of insects and other pests. These problems have to be worked out over a period of time - in some cases a period of years. I understand that a detailed study must be made over a much longer trial period than has at present been experienced. An assurance has come, not only from the Department of National Development, but also from the Government that this step is being taken. It is difficult to give a decision until all the knowledge that can be made available has been obtained. Not only is it necessary to look at aspects of this scheme including soil, insect pests and the other matters that I have referred to, but we must also consider the whole matter of population, housing and the general living conditions of the people who go there and their location in relation to the rest of Australia. All these aspects of the project must be given a trial period.

It is perhaps easy for a group of enterprising people to give up their homes in the southern parts of Australia and spend a period of adventure in a newly developed area in an exciting remote part of the Commonwealth, but they must be given time to decide whether they are satisfied that they and their families will stay there. Kununurra, however it can be reached by aircraft, is still a long way from the rest of Australia and therefore I think the Government has been wisely cautious in the thorough and continuing examination it is giving to matters relating to development at Kununurra and the Ord River generally. Before development of the project can be completed, the Government must conduct an extensive examination of the marketability of cotton crops grown in the area and their effect on the total economy of Australia. As the Minister for National Development (Mr. Fairbairn) said in another place, we must realise that if construction of the major dam on the Ord River is to be proceeded with, the Government must be certain that cotton produced in the area can be grown for export at world prices and with no bounty. The Minister believes that although the present cotton production on the Ord is profitable, the fibre must be able to be exported without the payment of a bounty.

When the previous Prime Minister, Sir Robert Menzies, visited the Ord River project he indicated that, the Government having provided adequate money for the construction of the Ord diversion dam and associated works, this surely demonstrated its understanding of the needs of the area and the necessity for northern development in that part of Australia. “Northern development “ is a phrase that has been freely bandied about, not only here but in many other places. I think that when we talk about it we may not be sufficiently aware of the practical problems which northern development, in its total aspect, involves.

The Ord River, Kununurra and related areas are only one part of the total programme of northern development.

I underline what has been said this afternoon: That this aspect of northern development must take its place with all the other aspects of the matter that we are considering today. The Ord River project is related to other activities in the northern and northwestern parts of Western Australia and I think everyone would agree that the phenomenal development of the area will make a valuable contribution to Australia’s economic situation. The port of Wyndham has benefited considerably and, with the establishment of the town of Kununurra, a whole range of ancillary services, agencies and community facilities has emerged. Because of other associations I have been very interested in community developments at Kununurra, particularly the hospital that has been established there. While all these developments are proceeding with confidence, the need for study is clear because this is a community unlike any other in Australia.

In introducing this subject as a definite matter of public importance Senator Willesee used the following terms -

The failure of the Government to proceed with the next stage of the Ord River irrigation project as requested by the Western Australian Government.

While 1 and other honorable senators on this side of the chamber - and 1 believe the people of the Commonwealth - are all enthusiastic about the Ord River scheme, we believe no government should spend a great amount of money in that area without making absolutely certain that the steps already taken there will be consolidated and without examining thoroughly the proposed future development so as to be sure of the economics of the scheme and its ability to support people and keep them happy. No government would be justified in spending unlimited money there without being assured on all these matters. I think it must be emphasised again and again in relation to this project that, in examining the. many aspects of the scheme as it has, the Government can take credit for handling the people’s money wisely and cautiously and for exercising its stewardship with wisdom and foresight.

Cotton is a product comparatively new to the Australian economy, lt is a product which must take its place among a number of other fabrics and fibres and it is not the only product of the Ord River area, where there is beef production and general farm development including crops other than cotton. All these aspects of the matter must be examined during a period of experimentation. When all this has been done and the suitability of the area has been established to the satisfaction of the Government and of the departments concerned, I am certain that the project will be proceeded with and will not only be profitable and a credit to the people who live there, but also will be a part of Australia’s development of which the Government can be proud. Another aspect of the matter, at the international level, relates both to our populating of this remote area and also the development there of products and crops for export, to the benefit of other countries in this part of the world.

The PRESIDENT:

– Order! As the time allowed for this debate has expired, the business of the day will be called on.

page 960

QUESTION

NEW BUSINESS AFTER 10.30 P.M

Motion (by Senator Henry) proposed -

That Standing Order No. 68 be suspended until (he termination of the present period of sittings to enable new Business to be commenced after 10.30 p.m.

Senator McKENNA:
Leader of the Opposition · Tasmania

– If my understanding of the arrangements that were made yesterday for the sittings of the Senate is correct, then I shall surprise myself a little and Government supporters even more by indicating that I shall not be opposing the motion. That makes history. This will be the first occasion in a very long term in this position that I have adopted such an attitude. I thought that the Leader of the Government in the Senate (Senator Henty) yesterday put a very commonsense proposal to the Senate when he provided for earlier sittings each day, abbreviated the recesses for luncheon and for dinner, and elongated the sitting times until 11.30 p.m. That, with the addition of the Friday sitting, will add another 16 hours this week to the normal sitting time of the Senate. My understanding is that it is Senator Henty’s firm intention not to sit after .11.30 p.m. That is the latest time he has taken. Of course, that would not obviate or rule out the possibility of concurrence between the Opposition and the Government if the Government wished to continue briefly after that hour to settle some matter. That is the first point I make.

The other point I want to make is that in the circumstances we will not object to the introduction of new business after 10.30 p.m., provided that if a new bill or a matter of that nature is introduced after 10.30 p.m. we are not required to proceed immediately to debate it. I take it that that will be the situation. If it is merely a question of elevating a matter low on the notice paper into a preferred position, we will have no objection, again unless we concur in the introduction of business and agree to go straight on with it. I think that Senator Henty has made the most commonsense approach to the end of session sittings that I: have seen in the Senate down 22 years. The arrangement seems to be working well. I am confident that it will work out quite satisfactorily and that we shall all finish the session with proper time being given to the consideration of each matter and with no skin off anybody’s nose.

Senator Gair:

– What is wrong with sitting next week? It is untouched.

Senator McKENNA:

– If time does not permit us to finish this week, the Opposition has no objection to coming back next week. I think that Senator Henty has that in mind. He has given an opportunity for the Senate to finish this week, working reasonable hours. Having discussed the matter with him, I think I can say on his behalf that if the work is not completed this week he is not averse to coming back next week, nor is the Opposition. Having regard to the matters on the notice paper, both here and in another place, and to the action that the Opposition contemplates in respect of them, I should say that under the new arrangements there is a reasonable prospect of concluding this week without undue haste. But if there is not, we certainly will not demur about coming back next week to complete the business in a proper form.

Senator HENTY:
Minister for Supply · Tasmania · LP

– in reply - I (hank the Leader of the Opposition. (Senator

McKenna) for his comments. He has outlined the proposal that I have in mind. I have always endeavoured to avoid late or all night sittings. They are wearying and in the long run take their toll of the health of honorable senators. I do not think we achieve by such sittings what we should achieve by adopting this more practical approach. I want to pay a tribute to the Government Whip in the Senate, Senator Scott, who, whilst I was away, roughed out this programme. We knocked it about and got it into shape, but the initiative in drawing up the programme was largely his. When I came back from overseas 1 found that he had done this work. I want to say that I appreciate it.

Something may occur which will require us to sit an extra half hour or so at night, but I propose to consult with the Opposition closely before any such untoward situation arises. I feel that I would have the cooperation of the Opposition if we had to sit beyond half past eleven on any night. If we do not finish this week, I think that we should come back next week; but with the added sitting hours we should be able to finish the work this week.

Question resolved in the affirmative.

page 961

CUSTOMS TARIFF BILL (No. 2) 1966

In Committee.

Consideration resumed from 10th May (vide page 923).

First Schedule.

Tariff Amendment 246.

Senator CANT:
Western Australia

– I do not now propose to speak on Tariff Amendment 246, but I wish to move two amendments to Tariff Amendment 248.

The TEMPORARY CHAIRMAN (Senator Wood:
QUEENSLAND

– Order! I cannot allow the honorable senator to move his amendments at this stage.

Tariff amendment agreed to.

Tariff amendment 247 agreed to.

Tariff Amendment 248.

Senator CANT:
Western Australia

– I seek leave to move two amendments together.

Leave granted.

Senator CANT:

– The discussion on the first amendment will be sufficient to cover the second one, and I propose to ask the Committee to divide on them together. I more -

  1. In sub-item 51.02.11, leave out in the General Rate column all words after “20% “ and in the Preferential Rate column all words after “10%” down to and including “$0.40.”.
  2. tn sub-item 51.02.92, leave out the General Rate column all words after “ 20% “ and in the Preferential Rale column all words after “ 10% “ down to and including “ $0.40.”.

The necessity for moving these amendments arises out of a decision of the Special Advisory Authority to impose increased duties on polyethylene monofil and strip. Although there is one other decision of the Special Advisory Authority about which I can do nothing at this point of time, I will introduce it to show that the decision of the Special Advisory Authority on polyethylene monofil and strip imposes impossible hardship upon the cray fishing industry, and in fact upon the whole of the fishing industry in Australia.

The users of polyethylene monofil strip sought an increase in duties on imports of this material. They claimed that they could not manufacture the material profitably in competition with the imported materials brought in under the existing duties. It is interesting to note that the Tariff Board itself recommended the duties of 20 per cent, and 10 per cent, only some six months before the reference was made to the Special Advisory Authority about whose decision I now complain. The Special Advisory Authority recommended increases in duties to give producers an opportunity to operate profitably. The Authority recognised at the time that the imposition of higher duties would increase the price of rope made from this material. It admitted that the main use for this material was in the manufacture of rope. The Authority proposed increased rates of duty but at a lesser rate than that applied for by Synthetic Yarns. This increase was then hedged with a number of intangibles. I want to quote from the decision of the Authority. It said in its report -

  1. . it would not be desirable to increase the duties on monofil and strip to the level requested by the applicant. As already noted the price of imported monofil has fallen continuously over recent years. In order to give the industry some stability I propose to recommend that a temporary duty be imposed on imported monofil and strip equal to the amount, if any, by which the f.o.b. price of the imported product is less than 48dper lb. i.e. the approximate f.o.b. price of Japanese monofil at the lime of the Board’s last inquiry.

The Authority went on to state -

This method of assisting Synthetic Yarns will not be successful if the Australian rope manufacturers do not purchase the greater part of their requirements of monofil from the local producer. Provided the rope manufacturers are themselves adequately protected and provided Synthetic Yarns bases its price on the landed cost of imported monofil at the suggested rates of duty, 1 see no reason why the rope manufacturers would not support the Australian manufacturer of monofil.

These are strange reasons to give after having said that the industry required protection. They are strange reasons to give when there has been no undertaking given by the representatives of the rope industry that they will purchase their goods from the Australian manufacturer. They are also strange reasons to give when the rope manufacturers, the users of this raw material, give no undertaking to the Authority that they will not increase the price of the product they produce.

This is where the second leg of the decision of the Authority comes into the picture. In respect of rope manufactured from this material that was being imported, the Authority recommended that there be quantitative restrictions of 33i per cent, of the average of imports over the years 1964-65. This simply means that, irrespective of what price the manufacturers of rope may want to charge for rope, the users of the rope are bound to pay that price for two thirds of their product. This is the decision of the Authority that I cannot understand because this is done under licence. The matter does not have to come into this chamber at all. There is no way of challenging the decision. I want to quote what the Authority had to say in respect of this matter. It said -

The present situation is such that action should be taken to protect the Australian manufacturers of polyethylene rope. The protection accorded the industry will need to be increased to compensate for any increased protection given to the Australian industry producing monofil and strip but even without this necessity the industry would be in need of urgent protection.

Sitting suspended from 6 to 8 p.m.

Senator CANT:

– The report continues -

I have given consideration to the question of whether the protection can be appropriately provided by means of a temporary duty. A temporary, duty sufficient to cover the difference between the industry’s special price to the fishing industry and the lowest landed cost of imported rope of which I have knowledge and, in addition, to cover the extra cost involved in using locally produced monofil, would be substantial. The industry using most of the Australian requirements of polyethylene .rope is a primary industry largely competing on world markets and could not be expected to bear the increased costs which such a duty would involve.

I emphasise that the duties that are being applied to monofil and strip, on top of the quantitative restrictions that are imposed on the importation of rope, place an unnecessary burden on the fishing industry. I am aware that, if the duties are disallowed, we will place the rope industry in an awkward position and perhaps will reduce its capacity to carry on. We must make up our minds which industry is of most value to Australia. We must also make up our minds whether, by imposing increased rates of duty, we are protecting an industry or are protecting a profit position. I come down on the side of protecting the crayfish industry, because I believe that in this context it is of greater value to the Australian economy than is the rope industry. I am not unmindful of the opinion expressed by the Tariff Board, when it accorded the rope industry protection in 1964, that with a 20 per cent, general duty and a 10 per cent, preferential duty the industry should be able to operate on a reasonable profit basis. Therefore, I am not inhibited when I move that the increased duty that has been recommended by the Special Advisory Authority be disallowed. It is up to the rope manufacturers to become more efficient. The prices that are obtained by the crayfish industry are governed by world markets; the industry has no control over the prices it receives. It has no-one to whom it can pass on any cost increases.

For these reasons, I urge the Committee to support the motion for the disallowance of the increased duty. The rope industry would still be protected inasmuch as the consumers, because of the imposition of quantitative restrictions, would have to purchase two-thirds of their requirements from the Australian rope manufacturers. I must again emphasise that we in Australia seem to be imposing rates of duty without regard to their effect. I say without hesitation that, if industries in Australia demand the protection of this Parliament - in many instances they are entitled to such protection - then they should give certain undertakings. I noted recently in a report of the Special Advisory Authority on the importation of stainless steel reference to the fact that Commonwealth Steel Co. Ltd. had given an undertaking that, if it received protection, it would not increase the price of its product.

The CHAIRMAN:

– -Order! The honorable senator’s time has expired.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I rise simply to give the honorable senator an opportunity to complete his case.

Senator CANT:
Western Australia

– I thank the Minister for giving me that opportunity. In this instance, the rope manufacturers have not indicated that they will not increase the price of their pro-. duct. For this reason, we must study the position very carefully. Whilst in all these issues we endeavour to protect our own industries, our own workers and the people generally, who want to maintain the high standard of living that we have been able to achieve, we cannot afford to set up a tariff wall behind which people are likely to become irresponsible in fixing the price of their products. I do not want to flog a horse that perhaps is dead, but, as I see the position, rates of duty should not be imposed in order to protect industries unless opportunity is given to control the price of the commodity that is produced.

The crayfish industry employs far more workers than does the rope industry. I admit at once that the great bulk of the workers in the crayfish industry are self employed. Nevertheless, they rely upon the industry for their livelihood. This industry is a large earner of export income; but as far as I know, the rope industry is not an exporting industry and it does nothing to boost our balance of payments. The crayfish industry has no control over the price of its product, which is tied to world markets, but in this instance it is singled out to bear increased costs. For these reasons I would oppose the customs tariff increases.

Senator MCCLELLAND (New South

Special Advisory Authority on polyethylene monofil and rope, I support the amendment that has been moved by Senator Cant because of the grave consequences of the measure and the Authority’s recommendation to an important primary industry. While Senator Cant referred in particular to the crayfish industry, 1 relate my remarks to the effect that the measure will have on the fishing industry generally. First, there was a recommendation set out somewhere in the report of the Vernon Committee that reports of the Tariff Board and of the Special Advisory Authority should contain more detail. Having read this particular report, I think that more attention should be paid to those remarks in future. For instance, from a reading of the Special Advisory Authority’s report, we notice that this inquiry originated in a request for urgent protection by Synthetic Yarns Pty. Ltd. against imports of polyethylene monofil, and that a separate application was made by the Australian Rope Cordage and Twine Association for urgent protection against imports of polyethylene rope. We note further from the Authority’s report that the Tariff Board itself held an inquiry into monofil and other related matters in 1964 and that in January 1965 a recommendation was made that all of the products under reference be made dutiable at rates of 10 per cent, ad valorem British preferential, and 20 per cent, ad valorem most favored nation. In its report, the Board stated that it considered that with closer attention to costs and more effective sales promotion the local producer might be able to achieve a price and sales situation which would enable it to operate profitably with the recommended duties.

That, of course, was in January 1965. But in November 1965. we find, these urgent requests were made to the Special Advisory Authority. So after the Tariff Board dealt with the matter early in 1965 and made recommendations, within a period of 10 months the Special Advisory Authority was asked to report on whether there was a need for urgent action to be taken to protect the Australian industries producing monofil and rope of polyethylene. I have already mentioned that there appear to be shortcomings in the report of the Special Advisory Authority. One of the main shortcomings, it appears to me, is that despite the fact that the report covers six foolscap pages, there does not seem to be one word set out to state the views of those who were in fact opposed to the application. The report only sets out the names of those who opposed the application, and there was quite a considerable number. 1 should like to know in some detail what the matters were that in fact were raised by those who were in opposition to the application by Synthetic Yarns Pty. Ltd. and the Australian Rope Cordage and Twine Association. For instance, was it raised that this matter had been the subject of a Tariff Board recommendation only .10 months previously and that the Board itself had suggested that with closer attention to costs and more effective sales promotion - thereby surely implying that there could be more economic efficiency in the industry - the local producer might be able to achieve a price and sales situation which would enable it to operate profitably with the recommended duties?

Apparently, in its application for protection against imports of polyethylene monofil, Synthetic Yarns Pty. Ltd. stated that the main outlet for its product was in connection with the manufacturing of polyethylene rope and that it had not been able to make any sales - I emphasise the words “ any sales “ - to Australian rope manufacturers since some time in 1963. But on the other hand the Australian rope manufac.facturers claimed that in an attempt to compete with Japanese rope they had been obliged to import Japanese monofil. To quote from the report of the Special Advisory Authority -

They maintained that if the duties on monofil were increased without a corresponding increase in the duties on polyethylene rope all requirements of polyethylene rope would be supplied by imports, with no benefit at all accruing to the Australian manufacturer of monofilament.

It seems to me to be a very vicious circle, especially for those engaged in the Australian fishing industry which, of course, is the main industry hit by the proposals now before the Committee. Synthetic Yarns Pty. Ltd. requests that a heavy duty be imposed on monofil so that the Australian rope manufacturers will not use the Japanese product, and the rope manufac.facturers, on the other hand, seek a heavier duty on imported rope so that Australian fishermen will purchase the local product. Both Synthetic Yarns Pty. Ltd. and the

Australian rope manufacturers obtain increased protection under this proposal, whilst Australian fishermen and other persons engaged in the fishing industry have to carry the increased burden and at the same time cope with a decline in local fish production and increased imports from overseas.

As 1 see it, the question boils down to the simple issue of which industry is the more suitable to be protected - on the one hand the fishing industry, or on the other hand the monofil and rope industry. For the purposes of comparison it is worth having a cursory glance at each of them. First, let us take the rope and twine industry. According to last year’s “ Year Book “ that industry employed about 2,300 people in some 26 factories and the value of production was of the order of £4,700,000. In the same year, there were all told about 8,200 people employed in the fishing industry, and the total gross value of production was of the order of £17 million. It can be seen readily from a cursory glance at these two industries that there is really a great difference between the numbers of persons engaged in them and a marked difference in the gross value of overall returns. In many instances, whole communities are completely dependent upon the commercial success of the local fishing industry. In New South Wales, one need only refer to coastal townships such as Ballina, Tea Gardens, Nelson’s Bay, Brooklyn and Ulladulla by way of illustration of this point. Basically, the lives of all of the people in those towns and many others are built around the success of the fishing industry.

So, when one appreciates that fish production has declined substantially in the last 12 months and that, as a result of this measure, added burdens will be thrown on to the industry, one sees that many people, many towns and, indeed - it is fair to say - many local communities, will be hit hard. As late as January last the Department of Primary Industry, in a publication entitled “ Australian Fisheries Newsletter “, indicated that preliminary statistics prepared by the Commonwealth Bureau of Census and Statistics showed that production of fish for 1964-65 had declined by 3.3 per cent, and that the gross value to fishermen had fallen by 10.9 per cent, compared with the previous year. This is a sub stantial decline in the gross value of a very important industry. Having regard to those economic considerations 1 believe that the Committee has to give very serious and close consideration to the measure now before it.

Knowing Australian fishermen as I do, 1 am certain that if they could get as satisfactory a product from the Australian monofil and rope manufacturing industries, even if it be at a slightly higher price than the imported product, they would be quite willing to purchase the locally produced article. But, living in the capitalist type of economy in which we do exist, 1 think it only stands to reason that the people who are in the fishing industry for their livelihood and for the provision of their families will certainly buy the better quality rope at a cheaper price.

The Special Advisory Authority in his report referred to a product known as Tanikalon and described it as having the advantages of a polyethylene rope combined with the advantages of a rope made from natural fibres. At the same time he pointed out that rope made from polyethylene monofil of the type produced by Synthetic Yarns Pty. Ltd. is not suitable for the berthing and towing of ships because the smoothness of the monofil gives the rope very little grip on bollards and things of that nature. Obviously this is a matter of great importance to the fishing industry not only because of the price differential between the imported and the locally produced article but also, as I have mentioned earlier, because of the quality and suitability of the two products.

I have referred previously to the article in the journal published by the Department of Primary Industry relating to the decline in the value of fish production in Australia. One should also peruse some of the advertisements appearing in this journal. One need only turn to page 41 of the January issue of “ Australian Fisheries Newsletter “ to see an advertisement inserted by the Kura.shiki Rayon Co. Ltd. of Osaka, Japan, in which it is pointed out that tuna long line has three times the life of the ordinary manilla line. The company states in its advertisement that this type of tuna long line - I point out that the tuna industry is important to Australia - has been proved to be the world’s most economical fishing line by Japan’s massive tuna fleet. The journal contains other advertisements but I will not weary the Committee by reading them. However, it is obvious that Australian fishermen generally prefer the imported material not so much because of its lower price in comparison with that of the locally produced article but because it is of a much better quality than the Australian article. Australian fishery resources, in comparison wilh those of other parts of the world, are not large. Although we are a large island continent completely surrounded by water and that there are some 2,000 species of fish in Australian waters, the fact remains that the stocks of each of these species are comparatively small. Australia lacks resources of such highly productive fish as herring and cod on which the major activities of the world’s fisheries are based. Fish of this kind form a large part of the fish that we import.

I believe that the proposal put forward by the Government in this Bill will have a very serious and deleterious effect on the Australian fishing industry. I think I have fairly set out that because there is a great decline in the value of fish production at this stage, the fishing economy is, of necessity, very tight. Added to the impost which will be incurred-

The CHAIRMAN:

– Order! The honorable senator’s time has expired.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

. I rise to give Senator McClelland an opportunity to conclude his remarks.

Senator MCCLELLAND:
New South Wales

– I thank the Minister. I was about to say that having regard 10 the loss of production occasioned to the fishing industry in the last 12 months and to the increased imposts which will be incurred by the industry as a result of this proposal, I believe the full consequences of this measure have not been taken into account by the Government. Therefore, I support the amendment which has been proposed by my colleague, Senator Cant.

Senator ANDERSON (New South Wales - Minister for Customs and Excise) [8.27J. - The debate in Committee has been on Tariff Amendment 248 which deals with polyethelene. By mutual consent the debate has revolved to a large extent around rope and I have not sought the intervention of the Chair because I have felt that there is a relation between the two items as rope is made from monofil. Further, I think the Senate likes to get a broad picture of any subject. For that reason, although rope as such is not in the tariff amendments on which we will be voting, we have permitted some debate on it.

Now let me make some rounding off remarks on the questions raised by Senator Cant and Senator McClelland in relation to rope. It is a fact that the Special Advisory Authority found that a substantial temporary duty would be necessary to cover the difference between the rope makers’ price to the fishing industry and the lowest landed duty-paid cost of the imported rope. The Special Advisory Authority felt that the position of Australian rope manufacturers could not be preserved by means of a temporary duty so he recommended import restrictions of 33i per cent, of previous imports. This is factual and found its expression in the Authority’s report which was tabled last March.

The important thing that must be remembered in relation to the aspect of the problem which has been posed is that the Special Advisory Authority took only a holding action. The matter has now been referred to the Tariff Board. Thar is the important point. The Special Advisory Authority made only a holding judgment and it will be competent for those people who have a special interest in this industry to take the opportunity to prepare and present a case to the Tariff Board on the issues involved in relation to rope.

Senator Wright:

– Of what order is the increase of duty proposed by this Schedule.

Senator ANDERSON:

– There is no increase in duty on rope and rope is not mentioned in the Bill we are discussing. It is only because it is a related matter that we agreed to allow it to be mentioned, and that is why I am replying to what honorable senators opposite said.

Senator McClelland:

– But there is an increase of duty on monofil.

Senator ANDERSON:

– Yes; but rope is before the Tariff Board at the present time and judgment will need to be suspended pending receipt of the Board’s report.

Senator Wright:

– That item then really is not before us.

Senator ANDERSON:

– No, it is not before us. Senator Cant made a point about an increase but, in view of the fact that this item is before the Tariff Board, this seemed to me to be an extraordinary approach to the problem. Quite clearly, the Special Advisory Authority, Sir Frank Meere, recommended these restrictions as a holding measure.

Now let me give some background on the matter of polyethylene monofil and strip. On 28th January 1964 this item was referred to the Tariff Board. At that date the duty levels were 15 per cent, and 71 per cent, on monofil and 121 per cent, and free on strip, general rate and preferential rate respectively. The inquiry was granted on the application of Synthetic Yarns Pty. Ltd. of Waterloo, and the case was supported by the Durabel Monofilaments Company of Granville, New South Wales. The argument put to the Board was that the duty reduction to 15 per cent, and 7 per cent., general rate and preferential rate respectively, following the Board’s report in 1962 increased competition from overseas and resulted in a considerable loss of sales by local manufacturers. The industry claimed that it could meet Australian demands for quantity, quality and range. That was its reason for approaching the Board. It claimed that it had the latest equipment and skilled operators and was technically efficient. It alleged that it was at a disadvantage compared with overseas manufacturers because of low material and labour costs and overheads. It claimed that it had intensive capital investment. Therefore, it sought protection through the Tariff Board.

The mathematics of the matter - I think Senator Cant referred to this point - were that the disability was in the fact that the selling price of the Australian manufacturers was 10Od. per lb. and the landed duty free cost of imported monofil from Japan was 55d. per lb. So the Australian manufacturers had a disadvantage of 45d. per lb. The Board considered the production of monofil and strip worthy of assistance, provided that the cost of such assistance was not unduly high. The industry is a relatively small one, but has good prospects for expansion. That is inconsistent with our tariff policies. The Board noted that Synthetic Yarns Pty. Ltd. was at a considerable price disadvantage compared with imported monofil and strip, but did not have an acceptable reason why its production should require a higher level of protection than was afforded to other materials. The Board was of the opinion that Synthetic Yarns Pty. Ltd., with closer attention to costs and better sales promotion, might be able to achieve a better price and sales situation wilh the new duties. It then recommended increases in duty from 15 per cent, and 71 per cent, to 20 per cent, and 10 per cent., general rate and preferential rate respectively, on monofil.

The item was then referred to the Special Advisory Authority on 16th November 1965. That brings the matter right up to the stage at which we are now with these tariff proposals. The Special Advisory Authority found that urgent action was necessary to protect and stabilise the Australian industry producing monofil and strip. That was its fundamental finding. The price of the local product was reduced from 10Od. per lb. to 62d. per lb., but the price was still undercut by imports. The Tariff Board, in its report of 1965, had stated that the production of monofil was an industry worthy of assistance. The price of Australian monofil was then 10Od. per lb. The price was reduced to 62d. per lb. for deliveries to Australian rope makers. That price approximated the landed cost of Japanese monofil at that time, which was equal to a free on board price of 48d. per lb. Despite the reduction there were no sales. The Special Advisory Authority recommended a sliding scale of duties imposing duties equivalent to the amount by which the imported free on board price was less than 48d. per lb. Here we get back to the fundamental point in any consideration of this matter. The Special Advisory Authority’s proposal is a holding measure, or a short term, emergency measure. The item has been referred to the Tariff Board which will follow its normal procedures. It will present a report to the Government. Then the Government will have to make up its mind whether to accept or vary the Board’s recommendation. The Government’s decision, in turn, will come before the Parliament. Then we in this place will have an opportunity to debate the matter and to adopt or reject the recommendation.

Senator Wright:

– What is there in the Schedule to indicate a time limit on the operation of this amendment?

Senator ANDERSON:

– This amendment will remain in force until the Tariff Board report is received. If the Board recommended that the matter be left as it is, the Government would not be required to take any action and the substantive duty would remain as it is in the present proposal.

Senator Wright:

– So what is temporary now may become permanent.

Senator ANDERSON:

– In the nature of things, the matter would depend on the judgment of the Tariff Board, having regard to the evidence it takes and its recommendation to the Government.

Senator Wright:

– What is the extent of the increase in the case of these fishermen?

Senator ANDERSON:

– That is an issue that is once removed from the matter before us, because it relates to rope. The increase would depend on the manufacturer’s sale price. We have a free economy.

Senator Wright:

– Well, what would it be on current prices?

Senator ANDERSON:

– I am not in a position to answer the honorable senator’s question because the increase would depend on the price at which the commodity was sold. The action in respect of the item with which we are dealing is a holding action. That is the basis on which I must reject the request for an amendment. The Special Advisory Authority has examined the matter. He has made a recommendation for a variation in the tariff and referred the matter to the Tariff Board, which is the competent authority to make the final judgment in the form of a recommendation to the Government. For that reason, I am not in a position to accept the request for an amendment made by Senator Cant.

Senator CANT:
Western Australia

– Mr. Chairman, two requests are before the Committee at the moment and I suggest that they be put to the Committee together.

The CHAIRMAN:

– There being no objection, that course will be followed.

Question put -

That the requests (Senator Cant’s) be agreed to.

The Committee divided. (The Chairman - Senator T. C. Drake-Brockma n . )

AYES: 20

NOES: 25

Majority . . . . 5

AYES

NOES

Question so resolved in the negative.

Tariff Amendment agreed to.

Tariff Amendment 249.

Senator O’BYRNE:
Tasmania

.- The Opposition wishes to make a request to amend Tariff Amendment 249. I move -

That the House’ of Representatives be requested to make the following amendment, viz. - Omit subitem 51.04.929.

This Amendment was given special prominence in the second reading speech of the Minister for Air (Mr. Howson). He said -

The General Tariff rate of 55 per cent, ad valorem -as recommended by the Board will apply to colton fabrics weighing more than 6 oz. per square yard. . . . The Board’s recommendation on man-made fibre fabrics would have farreaching effects on the local industry. It would reverse the former pattern of protection which had been in force for some years and which encouraged local production of the lower value fabrics- for which long runs are available - and discouraged manufacture of the higher priced materials. As this might lead to a significant change in the industry’s pattern of production, the Government was concerned that the industry should have time to make any adjustments it considered necessary without undue dislocation of production. Accordingly, it is proposed that the duties on man-made fibre fabrics will have a minimum rate of $0.20 per square yard. An upper limit of $0.50 per square yard is also proposed for all man-made fibre fabrics except some special fabrics used principally for furnishing. Although a reduction in the present duties on lower value fabrics and an increase in duties on the higher priced materials is proposed, the variations from the former levels of protection are somewhat less than those recommended by the Board. The industry, however, will again be reviewed by the Tariff Board within two years.

The Opposition believes that this is an example of the position the Government is getting into through overlapping in agree ments it is making with New Zealand and Japan at the expense of our local industries. We have just debated the duty on polyethylene monofil and rope. We noted that the scale was weighted in the other direction. In the Tariff Board’s report of 6th August 1965 the reasons are set out in support of the industry’s request. They are that the Australian woven man-made fibre fabrics industry is economic and efficient; is located mainly in decentralised areas - decentralisation, of course, is supposed to be part of the policy of the Australian Country Party; uses the most modern plant and equipment and has kept abreast of advanced technical knowledge; produces almost every type of fabric required by the market; is intensely competitive; and is not earning satisfactory profits. Tn setting out the main reasons submitted in support of the industry’s request the Tariff Board’s report stated -

The present level and type of duty docs not provide sufficient protection and is too restrictive in its incidence. The industry must be protected in the higher priced fabric field to permit more flexible operation.

Japanese imports are increasing and are a threat to the local industry. Japan no longer exercises voluntary restraint on exports of such fabrics to Australia.

Under existing conditions the industry’s future is uncertain and only effective protection would ensure more efficient mill operation and allow the industry to plan ahead wilh confidence.

Industries such as those which produce manmade fibre yarns and those which finish fabrics depend substantially on the continued expansion of the woven man-made fibre fabric industry.

The parties who opposed the industry’s request gave the following reasons, which are set out in the Tariff Board’s report -

Under the existing levels of duty the industry has achieved steady growth and is profitable. Further increases in duties would reflect in the costs of garment manufacturers and create a real threat of an enlarged inflow of imported garments or substitution of knitted fabrics for woven fabrics.

I would like to draw the attention of the Committee to the following statement which appeared in the Tariff Board’s report -

The Board was not able to ascertain total funds employed by the woven man-made fabrics industry in respect of the fabrics under reference. Since the Board’s 1962 report the funds employed by the nine companies in the production and sale of these fabrics has increased, and in 1963-64 it was more than £10 million. The funds employed by these companies in all of their activities would be between £35 million and £40 million.

At the time of the Board’s hearings, total employment by the nine companies concerned in the production and sale of the fabrics under reference was 2,240 persons. Of these employees, 75 per cent, were males and 89 per cent, were adults. It is understood that employment has increased since the hearings. In those circumstances, it is reasonable to expect that the Government would try its very best to protect the industry. The Minister for Trade and Industry (Mr. McEwen) has been engaged in negotiating trade agreements and perhaps for diplomatic purposes this has its rewards. I endorse the opinions of Mr. J. R. Murray, a member of the Tariff Board, who presented an opinion dissenting from that of the Board. Mr. Murray said that the proposed rate of duty would not adequately protect the industry in its main area of production. The report stated -

Mr. Murray is of the opinion that in recommending an ad valorem duty in lieu of the present specific rate, the Board could bring about market and production re-orientation diametrically opposed to that which at present exists and which has been promoted deliberately in the past through a tariff designed to direct the efforts of the industry toward an area where the longest production runs are available, and where, as a consequence, the most satisfactory cost levels can be obtained. In so doing, the Board in the past, has found that this could best be achieved through the use of a specific duty.

He summed up by saying -

Generally it may be said that the man-made fibre weaving industry is extensively decentralised, is an important user of locally produced raw materials, is domestically competitive and has developed in a well balanced manner. If this comparatively satisfactory situation, which has been achieved by the assistance of specific duties over the years and more recently the addition of a temporary duly, is to be sustained, and if its long established and efficiently promoted pattern of production is to be preserved, it will be necessary to continue the past policy of including a specific component in the tariff, and to provide in addition an ad valorem component sufficient to permit a degree of flexibility in production necessary to meet normal and reasonable market demands.

That is the opinion of Mr. Murray and I think that, broadly speaking, it is the view of the Opposition. We are very proud of the industries that have been established in Australia. Even our biggest industries today went through their infancy and experienced teething troubles. Some were given assistance in one way or another and some received no assistance and battled against almost insuperable odds to become established. Today we have a firmly based industrial complex. The more industries we have the more balanced our economy will bc. This is not an insubstantial industry. Considerable capital is invested in it and we do not think it should be threatened because some agreement has been reached with another country for diplomatic purposes.

We want to delete item 51.04.929 which provides for a general rate of 55 per cent., or if higher, $0.20 per square yard and a preferential rate 55 per cent, less $0.02.1 per square yard: or, if higher, $0,179 per square yard. The Minister said that although a reduction in the present duties on lower value fabrics and an increase in the duties on the higher value fabrics is proposed, the variations from the former levels of protection are somewhat less than those recommended by the Tariff Board. I feel that the alteration in these tariffs can have only an adverse effect on an industry which, according to the evidence submitted, and as Mr. Murray has said, has been doing a very good job. The industry is extensively decentralised, which is a most important factor in balanced development of this country. Also, the industry is an important user of locally produced raw materials and it maintains a substantial amount of Australian labour. Its employs 2,240 persons. 75 per cent, of whom are males, and there is a very good balance between the numbers of adults and juniors employed - 89 per cent, adults and 11 per cent, juniors. It is pleasing to hear that employment in this industry is increasing. I believe this sub-item could have only an adverse effect on the industry andI hope the Committee will agree to its deletion.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– This sub-item in the Schedule found expression in the Parliament in Customs Tariff Proposals No. 8, presented in another place on 28th October 1965. It became effective on that day.

Senator O’Byrne:

– It is a completely new sub-item in the Act.

Senator ANDERSON:

– Yes. It gives effect to the Government’s decision following receipt of the Tariff Board’s report on cotton fabrics and man-made fibre fabrics. Senator O’Byrne referred to a dissent comment by a member of the Tariff Board, but a majority of the Board recommended uniform rates of duty at 55 per cent, ad valorem under the general tariff and 47 per cent, ad valorem under the preferential tariff. The effect of this is to simplify a tremendous number of items in the textile and man-made fibre area. There has been a multitude of items, each with a different rate of duty and this amendment is a rationale of the position. Although the Government accepted the principal recommendation for a general tariff of 55 per cent, ad valorem to be applied to cotton and man-made fibres, it was decided to introduce alternative fixed rate duties on several types of fabrics.

The Board’s recommendation on manmade fibres would have far reaching effects on the industry and here we come to the nub of the matter. It would reverse the present pattern of protection which has been in force for some years and which encouraged local production of the lower value fabrics for which long runs are available and discouraged manufacture of the higher priced materials. As a result of that the recommended duties amount to drastic reductions in the protection on the lower value fabrics and substantial increases in the protection of the higher value fabrics. It is proposed that the duty on man-made fibres should have a minimum rate of 2s. a square yard, and an upper limit of 5s. a square yard is also proposed for all man-made fibre fabrics except some special fabrics used principally for furnishing.

Although a reduction of the present duties on lower value fabrics and an increased duty on higher value fabrics is proposed, the variations from the present level of protection will be somewhat less than those recommended by the Board. Here again the situation is that the Tariff Board will review the matter in two years’ time. While I think both sides of the Parliament adhere to the fundamental policy of protection, at the same time we have to be diligent to see that the protection accorded to an industry is consistent with the need of the industry and is not out of proportion. It is true that there is a slight diminution of protection in certain areas, but this has been done in the light of all the circumstances that the Tariff Board had to consider in relation to across-the-board reductions. The insertion of the 2s. a square yard provision was a recognition that the protection recommended by the Tariff Board was a departure from long standing policy for long runs. This middle course, falling between the majority and minority recommendations of the Board, was adopted to give the industry time to make an adjustment to its production pattern without undue dislocation of its activities. As a further step the Government decided that the Board should again review the position regarding man made fibres in two years time. The judgment of the Tariff Board and of the Government was based on the evidence given at the Tariff Board inquiry. Therefore, I am not in a position to accept the amendment which has been moved by the Opposition.

Question put -

That the House of Representatives be requested to amend the Bill by leaving out the words proposed to be left out (Senator O’Byrne’s request)

The Committee divided. (The Chairman - Senator T. C. Drake-Brockman.)

AYES: 20

NOES: 25

Majority . . . . 5

AYES

NOES

Question so resolved in the negative.

Tariff Amendment agreed to.

Tariff Amendments 250 to 544 - by leave - taken together, and agreed to.

First Schedule agreed to with requests.

Remaining Schedules - by leave - taken together, and agreed to.

Clauses 1 to 5 - by leave - taken together, and agreed to.

Clause 6.

After section 17 of the Principal Act the following section is inserted: - “ 17a- (1.) … “(3.) If. in column 4 in the First Schedule, the letters ‘NZ’ are specified in relation to a rate of duty and those letters are followed by the letter (C) ‘-

Senator WRIGHT:
Tasmania

.- It will be recalled that yesterday in debating this Bill we concentrated a great deal of discussion upon the frozen pea industry in Tasmania. Sub-section (3.) of proposed new section 17a which clause 6 seeks to insert in the Act, provides for a reduction of the present operative duty over a period of eight years in successive stages of two years. The stages are operative from 1967, 1969, 1971, 1973 and 1975. Last night when the Committee was considering the application of that reduction by stages to the “ Surprise “ pea, the Committee accepted an amendment whereby the Agreement could operate for the first stage and the remaining stages would be left for judgment at the end of the first two years. I submit that the same principle applies to my present amendment. I move -

That the House of Representatives be requested to make the following amendment, viz. - Leave out sub-section (3.) of proposed section 17a, insert - “ (3.) If, in column 4 in the First Schedule, the letters ‘ NZ ‘ are specified in relation to a rate of duty and those letters are followed by the letter (C) ‘, that rate of duty shall, in respect of goods entered for home consumption on and after the first day of January, One thousand nine hundred and sixty-seven, be read as a reference to that rate reduced by one-fifth.”.

The effect of the amendment is to allow the rate of duty to be decreased to the extent of one-fifth over a period of two years from 1st January 1967. The basis upon which that is submitted as being the proper course is that in the light of the experience of the first reduction in the duty against New Zealand frozen peas, the Tasmanian industry will be better able to see more clearly the impact that is likely to be made on the industry by imports over the succeeding eight years.

I feel that I need not argue the validity of that submission at this stage in view of the debate last night. It seems obvious that Parliament, which is still the operative instrument to regulate the interests of the people of this country, should not make a judgment as to the phased operation and extinction of the duty against New Zealand peas for a period which, according to the clause, will continue until January 1975.

Commercial decisions of this sort can better be made when you are closer to the scene. Therefore, without in any way recommending an abrogation or repudiation of the New Zealand-Australia Free Trade Agreement I advocate a course whereby we as a Parliament reserve our judgment on the succeeding phases until the latter end of 1968 and make a decision as to reduction of the duty, if any should operate, as from 1st January 1969.

At the latter stages of the debate in Committee last night we were indebted to Senator Cotton for drawing our atention again to Article 9 of the Agreement, with specific reference to the proposal then before the Committee which was the same in substance as the one now before us. In deference to what was said by Senator Cotton on that occasion I would like the Committee to take note, for a few minutes, with great particularity, of what this Article provides. It is clear from reading the Article that it provides that in case of serious injury to our producers, Australia may in writing request consultation with New Zealand. Under paragraph 2 of this Article, if New Zealand and Australia do not reach a mutually satisfactory solution within a period of 60 days from the commencement of consultations, Australia is entitled, after giving written notice, to suspend portion of this Agreement to the extent that is necessary to protect the industry concerned. New Zealand is entitled to counter that move by suspending for an equivalent period and for an equivalent value in money the operation of reductions in our favour. Therefore, first of all, there has to be a period of actual or serious injury to the industry. Then there has to be a period of at least 60 days for mutual consultations. Then, notice in writing has to be given, so that the period that is actually taken administratively to operate this provision is much more than 60 days.

Even if the provision operates so as to suspend the reduction in duty, I invite attention to paragraph 3 of this Article, which is a great limitation on the efficacy of the Article, particularly in the last two lines, because in such an event Australia would not be entitled to impose import duties against New Zealand during the period of suspension at rates higher than the lowest rate applicable to the import of similar goods from any third country. That Article, as I submitted to the Senate last night, will operate during the first period of two years, if my poposal is accepted. I again stress to the Committee that it in no way operates as an alternative to the proposal that I put.

I ask the Minister for Customs and Excise (Senator Anderson), if he makes any observations on this debate, to explain to me how the terms of that Agreement are incorporated into the acts of Parliament so that the Minister, consistent with the statute now before us, will be authorised to make the suspension of duties in accordance with that Agreement. I submit that the acceptance of my amendment follows exactly on the principle of the amendment that the Committee accepted last night and that it is a just measure of reservation on the part of the Parliament concerning any decision to operate the subsequent phases of this Agreement in relation to the frozen pea industry as from 1st January 1969. I ask the Committee to accept the amendment on that basis.

Senator O’BYRNE:
Tasmania

– The amendment moved by Senator Wright will have the support of the Opposition. During the course of the Committee stage yesterday he did not support our amendments which would have eliminated from the provisions of the New Zealand-Australia Free Trade Agreement and the relevant legislation Tasmanian peas and beans. However, he was successful in imposing a limit of two years in respect of dehydrated peas, within which time the industry will have an opportunity to see how the new tariff arrangements work. In this amendment that we are now dealing with, he has brought under the same conditions peas preserved by freezing. It is in line with the amendment carried dealing with dehydrated peas and therefore it has the support of the Opposition.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I think we need to go back to the debate yesterday to get a picture of what transpired in relation to the proposed amendments to the Schedule concerning frozen peas and beans. Senator Wright, when speaking in the debate, spoke with such eloquence that Senator Gair was influenced to stand and point out what a magnificent speech he had made. Senator Gair particularly referred to the fact that Senator Wright had acknowledged that there was not a threat to the frozen pea and bean industry. In fact, Senator Wright indicated that he was not prepared to vote in favour of the Opposition’s amendment to reject the relevant item from the Schedule. I think that is factual and documented. What. Senator Wright went on to say subsequently was that he was impressed with the argument that there might subsequently be some possible threat to the industry because of the phasing out proposals to be carried out in a cycle over eight years. Therefore, he wished to project a middle course whereby the Senate acknowledged, admitted and accepted the phasing out for the first two year period by one-fifth, and then at that point of time the Government would be required under the terms of the New Zealand-Australia Free Trade Agreement, to introduce a new tariff proposal to cover the subsequent phasing out provisions.

I want to go back to the fundamentals. No case was established in the debate yesterday - and it lasted practically all day and late into the night - or today to show that there is any threat to the frozen pea and bean industry. Fears were expressed - natural fears no doubt - but there was no evidence of any threat to the industry. Indeed, during the debate, in reply to some of the speeches made, I was able to point out that the United States of America supplies the biggest quantum of frozen peas imported into Australia. I pointed out that the door would be open, under the phasing out and the reduction of tariff rates, for New Zealand to capture the industry at the expense, not of local production, but at the expense of U.S. exports which would in the ultimate be in an adverse duty position. As I pointed out in the debate, there has been a tremendous increase in the consumption of frozen peas in Australia in the last few years. I think that last year the increase was as high as 50 per cent. So if there is any fear that the concession given to New Zealand will injure the Australian industry, that injury will be so small as to be virtually nonexistent. The fact that Australia does not eat anywhere near the same quantity of frozen peas per head of population that New Zealand eats indicates a tremendous reserve of trade for this commodity. Moreover, there is a tremendous importation of the American product. All these potential outlets could more than offset the effect of the importation of frozen peas and beans from New Zealand.

The case for injury to the Australian industry has not been established. On the other hand, I suggest that it has been established that there is an increasing demand for locally produced frozen peas and beans. I repeat that it has been established positively that no injury will be suffered by the Australian industry and that there will be ample opportunity for trade in the future, particularly in Tasmania. Senator Wright acknowledged all these things when he indicated that he would not support the deletion of the item as sought in the Opposition’s amendment. Having said that, he has succumbed-

Senator Wright:

– I said at the second reading stage that that is the course I would follow.

Senator ANDERSON:

– The honorable senator certainly did. He outlined his attitude to the Labour Party’s amendment with such eloquence as to attract extraordinary comment. I was about to say that the honorable senator has succumbed to the niggling fear that by the end of the first phasing out period some injury might be suffered. He has suggested that we should proceed only as far as the end of the first phasing out period and that in the light of experience gained we should then bring forward a new proposal. I have been quite factual in replying to that suggestion. I have said that such an attitude showed a lack of faith in the safeguards that have been written into the Agreement, particularly in Article 9. Senator Wright referred to that Article again tonight. He said that Article 9 was drawn in such a way that there would be quite a distinct time lag if the industry thought it was aggrieved and consulations had to be held. Article 9 still has validity under the new proposal.

Senator McKenna:

– Is the Minister talking about the suspension of the application of certain provisions?

Senator ANDERSON:

– Yes. Article 9 could still be operative. We should not be too critical of the Article. It is part of an Agreement which is reasonable, fair and acceptable. In any such negotiations, the nations concerned have to come to the conference table prepared to compromise to some extent. Article 9 can be invoked where injury is threatened. Contracts relating to frozen vegetables are negotiated in advance of planting. I understand that in certain circumstances they are negotiated on a two year basis. So any argument based on time lag does not necessarily have the validity that Senator Wright would suggest. There would be ample warning to the growers of any threat. There would be time during the growing period for definite action to be taken in the case of alleged injury.

Senator Wright:

– The Minister is assuming that a two year contract would be at a fixed price.

Senator ANDERSON:

– I am not. I said that sometimes there is a two year contract and sometimes there is a one year contract. These contracts are negotiated at the time of planting. I suggest that the availabality of this time in which action can be taken will give more flexibility to the Article than might otherwise be the case. If we were to pause at the end of the first phase, that would create a degree of uncertainty which would be a negation of the concept of phasing as provided for in the Agreement. The whole purpose of providing for progressive phasing out over a period of eight years was to enable the industry to adjust itself. The phasing out provision was adopted having regard to the current state of the industry, the nature of importations from other countries, the tremendous increase in consumption in Australia, and the best interests of the industry and of the Australian economy as a whole. I suggest that if the phasing out is to be left in a state of uncertainty and if there is to be disputation or a further examination at the end of the initial period, then that in itself could cause injury to the industry. I do not want to say any more on this subject. It was fairly well canvassed yesterday. A similar request in relation to dehydrated beans and peas was agreed to yesterday.

Senator Wright:

asked a question about paragraph 3 of Article 9. The note 1 have before me states that this is merely a most favoured nations provision and that, if we want to increase duties on New Zealand commodities, then we must increase them on commodities from all countries. I must admit that I am not completely seised of the implications of that. If there is some other angle to it, we may be able to resolve it. I want to come back to the important issue involved. Here we have an Agreement of great importance to Australia and of great importance to New Zealand. Here we are striving to get a free trade area between Australia and New Zealand and there is provision in the Agreement for us ultimately to get to the point, as we hope we shall, where our commodities are traded freely between the two nations. This is a very important step that we are taking. In taking the step, I do not think that we should balk at some industry which our Government, in its very best judgment - I can only leave it at that - believes will not be injured by the concessions that it is proposed to give to New Zealand in relation to frozen peas and beans.

Senator PROWSE (Western Australia) 19.33]. - I rise to put forward one point in support of what the Minister has been saying in connection with the importance of this Trade Agreement with New Zealand. I do not think that we should do anything that would in any sense damage the degree of co-operation that has been exhibited by the conclusion of the New Zealand-Australia Free Trade Agreement. Our two peoples, situated as we are, must get closer and closer together in respect of trade, in the world context of the developments that we see in the markets in which we both are interested. We have many interests in common and we need to see that those interests are protected. What this amendment does, in effect, is to produce a vote of no confidence in the Agreement. Tt says, in effect, that the Australian Parliament has reservations about the protective mechanism, the safeguards to which both New Zealand and Australia have subscribed. I want to think for a moment of the repercussions that may develop in New Zealand to the Australian attitude in this matter. Here we are saying: “ Yes, we have written safeguards into it, but we do not think that they are good enough for the Australian industry.” Is it not natural for the New Zealand Parliament to say: “ If the Australian Parliament does not think that these safeguards are good enough, where do we stand? “ There would be, as the Minister said, a degree of uncertainty, a degree of doubt as to whether this Agreement was in fact protecting the interests of our two countries. I regret very deeply that this amendment has been brought forward, and I shall regret it even more deeply if the Committee supports the amendment.

Senator COTTON:
New South Wales

– I want to be very brief. I tried to mention last night that I thought there was fairly adequate protection in Article 9, and I still adhere to that view, although I respect Senator Wright’s view, and I respect also the problems of Senator Wright and other persons in Tasmania. I want to make a point in an effort to be helpful and not to be in any sense critical. Senator Wright queried the provision in paragraph 3 of Article 9 relating to higher import duties. It is quite important to remember that it was brought out in the early part of the discussion some weeks ago that this is an Agreement between the two countries really to become partners, and that they will then have an ability to impose higher duties against third countries. In this case, the third country is the United States of America, a substantial exporter of peas to Aus.Talia

So one of the best protections that could be given under Article 9 would be for the Australian producers of peas to have sought long ago higher duties against American peas, in the interests of their own industry. 1 do not believe that they have done this, and the fact that they have not done it makes me believe that the damage will not be anything like as serious as has been suggested here. They themselves do not seem to contemplate the same sort of danger, because they have not sought to move to protect themselves fully under Article 9 which, in its three parts, must be known to people. This is said only in the interests of trying to be helpful. I believe that Article 9 gives that industry very good protection indeed in a shorter time than a two years cycle.

Senator WRIGHT:
Tasmania

.- I rise to make reference to the inadequacy of the Minister’s explanation of Article 9 of the Agreement. If the record were left with the statement that the Minister put to us, this would be a very deficient assurance to the Committee. I have not at any time during the consideration of this Agreement been led to understand that the operation of Article 9 is so limited as the Minister read it to be. He said that if we wished to suspend the reduction of duty against New Zealand we would have to do it on the same basis as with other favoured nations and it would have to be equally applicable to other favoured nations. Let us consider the case in which, during the period of this suspension, serious injury accrues to our industry. The Agreement provides, in paragraph 3 of Article 9 -

A member State taking action in accordance with the provisions of paragraph 2 of this Article shall not levy on the goods referred to in that paragraph . . .

I omit reference to revenue duties and taxes . . .

  1. . import duties at rates higher than the lowest rate applicable to imports of similar goods from any third country.

If that means that we can protect ourselves in that emergency only to the same extent as the lowest protection that is operated against any third country - as I think it does - it proves the inadequacy of the operation of Article 9 and reinforces most strongly the prudence of this chamber of the Parliament in allowing the phasing out of the duty against New Zealand step by step.

It is quite wrong for Senator Prowse to say that such a proposal indicates a want of confidence or that it is damaging the degree of co-operation. Just as in negotiations between the Country Party and the Liberal Party, hardheaded considerations apply - mutual co-operation is engendered only by the hardest of mutual considerations - so commercial agreements between New Zealand and Australia will be made on a hard bargaining, business basis. Australia will respect New Zealand and New Zealand will respect Australia the more, the harder they fight for terms to protect their own industries. But the Committee of the Senate is not offering any fighting gesture of that sort, lt is simply saying that with the imponderables of the impact of this Agreement upon a rather vulnerable primary industry such as frozen peas, in the light of two years experience of the first reduction of duty, the Parliament will be able to make a wiser decision in two years than it is able to make at the present time as to whether or not we should gear our industry into suffering the subsequent phases of the reduction over the eight years.

Without wishing to engender any heat in this debate I express quite coldly and deliberately some degree of resentment at the way in which the Minister summarised my speech of yesterday. I did say that there was some threat to the Tasmanian pea industry from the initial operation of this Agreement but I did not think on judgment that it was a significant threat. I based that view upon the fact that Australia had increased its production in the last year from 37 million lb. to 57 million lb. and had increased its consumption in the same period from 39 million lb. to 62 million lb. Relating that to the imports from New Zealand, which in the year to 30th June 1965 were 2 million lb., and counting Surprise peas at their natural quantum, I pointed out that for the nine months to March 1966 the total imports of New Zealand peas would not have exceeded 1.5 million lb.

J then said that I, as a member of the Senate, although very concerned for an industry in what to me is a very precious part of Tasmania - an industry upon which primary producers are dependent for their essential livelihood - had no wish to see a repudiation of (he Agreement with New Zealand and therefore would accept the judgment of the Minister in bringing the relevant portion of the Agreement into operation for an initial period of two years. But I said also that it would be prudent to allow the operation for only two years because although the Agreement envisaged subsequent duty reductions extending over a period of eight years, to me the imponderables were such that although my judgment was firm in relation to the first two year period, I needed the opportunity to review the matter at the end of that time. That is the way in which my approach to the industry should be stated.

Having regard to the inadequacies of Article 9, having regard to the fact that it is not at all an alternative to the amendment that I put, and having regard to the risks to this industry and to the fact that the proposal does not involve anything in the nature of a repudiation of the Agreement, I submit that it is completely proper, as Senator McKenna pointed out last night, to gear the Agreement to operate in accordance with this amendment.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– Adverting to Article 9, 1 want to make the point that if it was claimed that injury was sustained and it was decided to impose a duty on frozen peas against New Zealand, and if that duty proved to be higher than that imposed on other countries, it would be necessary to increase the duty on those other countries so that New Zealand would not be paying a higher duty than was being paid by anyone else. That is a point about which there has been some element of doubt.

I do not want ever to be put in a position of having, with malice aforethought, misquoted any honorable senator. After all, “ Hansard “ is here to prove the right and wrong of those things. However, 1 repeat that to me Senator Wright’s argument yesterday was based, as he said, on following the judgment of the Minister for Trade and Industry but apparently he was willing to follow the judgment of the Minister for Trade and Industry only a certain distance.

Senator Wright:

– For eight years, yes.

Senator ANDERSON:

– The honorable senator was prepared to accept and acknowledge the validity of all the arguments that the Minister and the Government brought to bear in the writing of the Agreement - he in fact quoted them himself when he pointed out the tremendous increase in Australian consumption in one year - but then, extraordinarily, on the basis of some fear that some injury could be sustained, he was not prepared to go the full distance of eight years despite the fact that, as a result of all the research and study the Government had made, protective provisions were included in Article 9 which were designed to meet the situation if regrettably some circumstances emerged which were not in contemplation when the Agreement was written.

Let me now point out that Article 9 takes its form from the Articles in the General Agreement on Tariffs and Trade. Its form, its construction and its phraseology find their origin in G.A.T.T. documents. Therefore, it is not unique in the sense that it has a special form. It is the accepted form of article in agreements between countries which are striving to reduce progressively the duties that apply between them.I think we all recognise that competition in trade and commerce play a very important part in the relationships existing between countries. Generally speaking,I am sure all honorable senators will agree that we are striving to lower tariff barriers between countries. We have made a first step in relation to trade between Australia and New Zealand. We have a great opportunity now to do something which will make history and which will be for the future good of both Australia and New Zealand. I would not like to see any barrier placed in the path of this great achievement on the basis of a fear which is not sustained by fact.

Question put -

That the House ofRepresentatives be requested to amend the Bill by leaving out the words proposed to be left out (Senator Wright’s request).

The Committee divided. (The Chairman - Senator T. C. Drake- Brockman.)

AYES: 24

NOES: 22

Majority . . . . 2

AYES

NOES

Question so resolved in the affirmative.

The TEMPORARY CHAIRMAN (Senator Wood:

– Order! The question now is: “ That the House of Representatives be requested to amend the Bill by inserting the words proposed to be inserted.”

Question resolved in the affirmative.

Clause agreed to with a request.

Remaining clauses - by leave - taken together, and agreed to.

Bill reported with requests; report adopted.

page 980

VINYL RESIN BOUNTY BILL 1966

Second Reading

Debate resumed from 5th May (vide page 805), on motion by Senator Anderson -

That the Bill be now read a second time.

Senator O’BYRNE:
Tasmania

.- This Bill provides for an extension of the operation of the Vinyl Resin Bounty Act 1963 to allow the Tariff Board to present a report on vinyl resin. The amount of protection afforded to this item has proved to be such that it has been included in a general tariff inquiry into various items. So, there will be an extension of the period of operation of the protection given to this industry until the Tariff Board report is presented. The Opposition does not oppose the Bill. We believe that, when the Tariff Board makes its recommendations and this matter comes up again for review under future legislation, we will then be able to apply ourselves to a full consideration of the matter. Therefore, we support the measure.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 981

TRACTOR BOUNTY BILL 1966

Second Reading

Debate resumed from 5th May (vide page 806), on motion by Senator Anderson -

That the Bill be now read a second time.

Senator WILLESEE:
Western Australia

– This Bill proposes to extend the operation of the Tractor Bounty Act for a period of six months. This Act was first introduced into this Parliament in 1939. lt provides for a bounty on tractors produced in Australia. This Bill projects the bounty for six months after 30th June in order to cover the period during which the Tariff Board is examining the matter of tariffs on imported tractors. The question of whether the tractor bounty will be maintained will continue to arise. This is an important factor in the production of tractors in Australia. At present the National Farmers Union is supporting the bounty. If the bounty is maintained, it is fairly obvious that a tariff duty will not be applied to imported tractors. Farmers have told me that the imported tractors have advantages. They are more versatile and are particularly suitable for owners of small farms, cane farmers, orchardists and primary producers who have to move amongst fixed objects. They are not so useful to the broad acre farmer whose main objective is to plough up as much ground as he possibly can and to harvest his crop of wheat, barley, or whatever it might be. If the tractor bounty is dropped, obviously a burden will be placed on farmers.

Some people might say that farmers are pretty well established. That may be true in some sectors of farming, but it is interesting that at the present time a tariff inquiry is proceeding. If a decision is reached that the tractor bounty should be dropped and a tariff duty should be imposed on imported tractors, the farmers who use the imported tractors will be affected. The Australian Labour Parly does not oppose this measure. Wc believe that the bounty has been very helpful over many years in assisting a secondary industry to become established in Australia. All sorts of tractors have been developed, particularly the big types of tractor, lt has been helpful to farmers who have been trying to get established. We certainly support the proposal that the bounty should be continued.

I merely mention the fact that the Tariff Board faces quite a problem at the moment in its inquiry into imported tractors. The problem is not as simple as it looks. It would be easy to say: “ Sure, we will drop the tractor bounty and apply a tariff duty to imported tractors. Then everything in the garden will be rosy.” 1 do not think there is any need to labour the point. The A.L.P. supports the bounty on tractors as it has done every year since its introduction. We hope that it will be continued and that when the final decision is made it will be for the benefit of the farming community of Australia.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– in reply - I thank Senator Willesee for indicating the Opposition’s support for continuation of the tractor bounty for a further period. As Senator Willesee has indicated, because the bounty will cease to be payable on tractors after 30th June and because the Government has referred the matter to the Tariff Board for report, it is fitting and proper that a short term piece of legislation which will extend payment of the bounty for a maximum period of six months should be introduced. In that period the Government hopes to obtain from the Tariff Board a report which will enable it to make a judgment and, if necessary, introduce suitable legislation. The contents of the Tariff Board report cannot be anticipated. 1 would not presume to guess at what the future holds for the tractor bounty. My function as Minister for Customs and Excise is to administer payment of the bounty under the provisions of the legislation. The parties engaged in the industry naturally will give powerful evidence at the Tariff Board inquiry. I have no doubt that an appropriate judgment will be made.

The Bill provides that payment of the bounty may cease earlier than six months ahead, at a date fixed by proclamation. That simply means that if the Government is in a position to bring down a new legislative proposal within the six months period, it can do so. That legislation would cancel extension of the bounty to 31st December 1966. The Bill also brings up to date the money provisions of the legislation. The bounty payable is converted into decimal currency.

The Government is grateful to the Opposition for its co-operation in this measure. I do not think I need to traverse its provisions. They are well known. The bounty is payable according to the horsepower of an engine of a tractor. On tractors with engines not exceeding 40 belt pulley horsepower, a bounty of $618 is payable. It is clear that it is a quite substantial bounty which has been of great benefit to the industry.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 982

ASIAN DEVELOPMENT BANK BILL 1966

Second Reading

Debate resumed from 5th May (vide page 864), on motion by Senator Gorton -

That the Bill be now read a second time.

Senator BENN:
Queensland

.- The main purpose of the Bill before the Senate is to allow Australia to make a contribution totalling SUS85 million to the capital of a bank to be established at Manila in the Philippines. When we are confronted with legislation of this nature we are entitled to examine the whole structure of the bank in the same way as we would examine, as private individuals, the structure of a public company in which we were about to purchase shares. The bank will be established for the purpose of helping, chiefly, countries in the Asian region. Certain organisations of the United Nations have judged all of the Asian countries to be underdeveloped with the exceptions of Japan and Turkey. The same organisations say that all the countries of North and South America are underdeveloped, with the exception of Canada and the United States of America. We are in the Oceania region in which the United Nations Organisation holds that Australia and New Zealand are the only two countries not classed as underdeveloped.

We must examine the proposed Bank and see whether it is worth Australia contributing SUS85 million to its capital for the purpose of assisting Asian countries to improve their economic conditions. We have been told that half of the SUS85 million will be paid in cash and the balance duly paid in various ways. Of the balance

SUS21.25 million will be payable in convertible currency in five equal annual instalments of SUS4.25 million and the remaining $US21.5 million will be payable in Australian currency. I am satisfied that the contributions will be made in due course and that we are in a position to meet that part of the contract, but on examining the proposal further we find that some features of it are not wholly satisfactory to us. The Bank will have a president and one or more vice-presidents and a board of directors, in addition to a board of governors. The Board will consist of ten directors, three of whom will be from outside the Asian region and seven of whom will be from within it. Each member country will have an equal number of basic votes and additional votes according to the size of its subscription. Australia will have a director on the Board of the Bank. I leave that matter there. I suppose, these officials will have duties to perform but I cannot imagine a bank with a capital of $US 1,000 million having directors and governors sitting permanently in Manila just watching the operations of the Bank. To me that is not commonsense.

We will look forward to receiving an audited annual report from the Bank, showing the business that has been conducted by it during the previous 12 months and the rates of interest charged during that period. We will also want to know whether a profit or a loss has been shown. We know that there will be no dividends paid, but what about the auditing of the accounts and the whole of the business transactions conducted by the Bank? Have any positive arrangements been made to have the workings of the Bank audited? Internal auditors could be employed by the Bank, but we would not accept any balance sheet prepared by auditors of that kind. We want an independent body of auditors to examine the whole of the yearly operations of the Bank. This Bank will be different from the International Bank for Reconstruction and Development and the International Development Association. These are under the control of a United Nations body which can send its auditors to them to carry out a complete audit and furnish a report. There we have a degree of independence in regard to the audit, but we should not agree to the measure unless provision is made in the Schedule for independent auditors to be employed. I think that is essential.

There are other provisions which I think should have been included in the Schedule. For instance, if the bank is to operate in Manila, its headquarters could be made a training ground for Asian clerks in banking work, instead of bringing them to Australia under the Colombo Plan. We should assist the Asian people in various ways to do the work that has to be done in their own interests. I think that principle should be applied as far as possible both in designing this project and in carrying out the work. The Asian people have to attain a degree of efficiency in looking after their own affairs. The Asian countries to which I refer are mentioned in annexure A. They are Afghanistan, Australia, Cambodia, Ceylon, the Republic of China, India, Iran. Japan, the Republic of Korea, Laos, Malaysia, Nepal, New Zealand, Pakistan, the Philippines, the Republic of Vietnam. Singapore, Thailand and Western Samoa. There are 19 countries in all and 17 of them - Australia and New Zealand are excluded - will be able to obtain loans from the Bank. For the purposes of the United Nations they are classed as underdeveloped countries. T am unable to say what their resources are and it is very difficult to get from the Parliamentary Library a clear record showing the natural resources of each of these countries, but I have here some rather interesting information about them and I propose to quote it later.

When we are dealing with the development of Asian countries we should consider what has happened in respect of our own development. We were in a fortunate position, in that we enjoyed a certain amount of paternalism from the United Kingdom over the years. We were able to produce many types of foodstuffs, and the fact that the United Kingdom was a constant purchaser of Australian products always stood by us. A ready market for a country’s products puts it on the high road to prosperity. It will be noticed that the produce of the 17 Asian countries that I have mentioned is similar and so it would be almost impossible for them to engage in international trade with each other. Even if they had the funds at their disposal to engage in trade with each other and with outside countries, they would find that the countries with which they wished to trade were producing the same things as they were producing. Tonight in the Senate we were told about the disposal of peas and beans grown in New Zealand and the difficulty that would arise if there was a glut on the Australian market because of overproduction of peas and beans in Tasmania. It is worth mentioning that the staple diet of the 17 Asian countries to which I have referred is rice. I am unable to say what their housing conditions are, or what they require in the way of clothing, but I think that their wants are not as varied as are those of the Australian people. From accounts which we read about Asian countries, we have a fair idea of the conditions under which the people live.

Afghanistan has a population of 11 million people. It is interesting to note that 70 per cent, of the people are engaged in agricultural industries. That indicates quite clearly that Afghanistan could not be classed as an industrial nation. Although I examined the records very closely in the Library, I was unable to ascertain what percentage of her population is engaged in manufacturing industries. Cambodia has a population of 5.7 million, of which 70 per cent, is engaged in agricultural industries and 7 per cent, in manufacturing industries. In Ceylon, which has a population of 10.6 million, 53 per cent, is engaged in agricultural industries and 8 per cent, in manufacturing industries. The Republic of China has a population of 9.3 million, of which 55.6 per cent, is engaged in agricultural industries and 12 per cent, in manufacturing industries. India has a population of 435.5 million, of which 70 per cent, is engaged in agricultural pursuits and 10 per cent, in manufacturing pursuits.

India has an area of 1,262,275 square miles. Australia has an area of 2,971,081 square miles. The huge population of 435.5 million Indians occupies a smaller area than does the 11 million population of Australia. I do not want to weary the Senate by giving this information, but I have gone to the trouble of ascertaining it because these are the countries which we will assist by contributing $US85 million to the capital of the Asian Development Bank. Iran has a population of 18.9 million, of which 56 per cent, is engaged in agricultural industries and 15 per cent, in manufacturing industries. Japan has a population of 93 million, of which 38 per cent, is engaged in agricultural industries and 21.7 per cent, in manufacturing industries.

To allow a comparison to be made with New Zealand and Australia, 1 propose to give the percentage of the population which is engaged in the agricultural and manufacturing industries. In Australia 10.9 per cent, of the population is engaged in agricultural industries and 27 per cent, in manufacturing industries. In New Zealand only 18 per cent, is engaged in agricultural industries and 25 per cent, in manufacturing industries. I. think those figures give an idea of the conditions in the countries which we propose to assist under this Bill. 1 am not in a position to say to what extent those countries are underdeveloped. If they are underdeveloped, there must be some way in which they can be developed. They must have some assets or resources which can be exploited for their own benefit, by raising their standard of living and providing them with a few comforts. We must allow them to do the things which will have to be done in the future if they wish to attain an average place in the world society. It would be wrong to say that some of these countries have not in the past received considerable financial assistance from the International Bank for Reconstruction and Development. I refer to the annual report of that Bank for the year ended 30th June 1965. lt states -

The fiscal year ending June 30, 1965, was the most active iti the history of the World Bank and its two affiliates, the International Development Association (IDA) and the International Finance Corporation (1FC). Loans, credits and other commitments amounted to $1.36 billion. The Bank itself lent more than $1 billion for the first time in a single year; IDA’s cumulative financing rose well above $1 billion; and 1FC investments and other commitments were at a higher level than before.

I followed this matter up by referring to some of the work that had been carried out as a result of the expenditure of these billions of dollars in Asian countries in particular. “Although the report is for the year ended 30th June 1965, the information that I am about to give shows the amounts of money that have been advanced to certain Asian countries and how they have been spent. These are cumulative amounts that have been spent over the years. The spending of money is not something new, so far as the Asian countries are concerned. The grand total that has been spent in Asia and the Middle East is $US3,011.5 million. Sums amounting to SUS682.3 million were spent on electric power, $US.l ,345.4 million on transportation, SUS620.4 million on railroads. SUS483 million on roads, SUS207.4 million on ports and waterways, $US5.6 million on airlies and airports and SUS29 million on pipelines.

The report also sets out how those countries have carried on so far as industries are concerned. The totals indicate that these countries have had advances made to them by the international Bank for Reconstruction and Development in the past. I suppose that those countries have assets to show for the money spent. An examination of the last annual report of the Bank shows that it includes all the names of those countries. Even the name of Australia is mentioned. The report shows what Australia has received and what we have spent. But I do not propose to go over that. I only wanted to mention this to indicate to the Senate that the countries involved in this scheme have received advantages in the past. It will not be a new experience for them to obtain money from a bank in order to develop their economies.

I think it is futile for the government of any country to borrow money and under” take development projects unless the people of that country are in favour of developing their country. There has to be a positive development atmosphere in a country before development projects can be carried out. We arc fortunate in Australia because there is a development psychology apparent in every State. Our people are strongly in favour of it. They know what their present living standard is and they know that if they do not increase the productivity of the country to some extent then they cannot increase their living standard. Therefore they are strongly in favour of development. In some districts the people are more strongly in favour of development than they are in others. We were speaking this afternoon of development in Australia. Only the other day I read a policy speech delivered by a Premier of Queensland in 1918. In that year he had to travel by boat from Brisbane to Townsville where he wanted to deliver his policy speech. In that year there was no train from Mackay to Townsville. In that year, although there may have been a place called Mount lsa, no lead, zinc or copper had been discovered and it was not known as a mining centre.

There has been development in every State in Australia. It has been due to the fact that we have been nurtured over the years by the United Kingdom. It was possible in the period when the States had to raise their own loans for their representatives to go to the London market and obtain money for development work. The result of that policy is shown today. We are classed as a developing country, but we are not fully developed. We will not admit that. We know that we have much more to do but we are on the road to a standard of development which will compare with that of many other countries.

It will not be possible for these 17 Asian countries that I mentioned a while ago to be nurtured by any other country. They cannot be taken care of in that way. They cannot obtain loans and sell their surplus crops and products in the way that Australia did. We were in the fortunate position that the United Kingdom had to go outside for her foodstuffs and basic materials for industries. New Zealand, Canada and Australia were the countries favoured by the United Kingdom and we had the benefit of that arrangement. How much longer that arrangement will continue I am unable to say. But while there is a demand for all the goods and primary products that Australia can produce we will go on making advances. 1 have great sympathy for these Asian countries. I do not know how they are going to spend the money they receive from this Bank. As I said a while ago those countries are populated by rice eating people. Perhaps they can be given money to use to build a dam on some river or watercourse so that they will be able to develop electric power. They can do many things. They can use money to increase the productivity of their rice fields and perhaps have more food. But I think the question of how they use the money should be left to them. I think that any country can be mollycoddled too much, including the Asian countries. It seems all right to me to establish this Bank. Australia will not miss the SUS85 million that she is to contribute to the Bank. When I began my remarks a while ago I said that Australia would survey the scene and take the same precau tions that we would take if we were allowed to invest our own private money in company shares. We would make a searching inquiry into the bona fides of the company concerned to see that it was not one of those companies that had shown a great loss in recent years. I am not going to mention any company by name.

Even if it were not a good move to make this contribution, we would feel compelled to do so because we realise - and I think every Australian appreciates this fact - that we are part of the world. We are concerned with our own nation first but we still are part of the world and we have to aid these people who require urgent help. I do not know of a better way to help them than to make this contribution to the Bank so that loans can be extended to these countries. A lot of the money could be used for educational purposes. If the money were spent only on educational institutions in order to educate the people of these areas I would be satisfied because they have to have a greater understanding of world affairs. The Labour Party does not oppose this legislation.

Senator DAVIDSON:
South Australia

– This Asian Development Bank Bill, which has been before the Senate for some time, is one of those that has universal acceptance in all ranks of the Senate. There is not a great deal more that can be said about it because all honorable senators are unanimous in their thinking on the general facts relating to the Bill, the reasons for it, and the aims set out in it. However, I would like to make my contribution to the discussion that has been taking place. I do not want merely to pay lip service and automatically say: “ Yes “. Rather I want to pay tribute to those who have conceived it and brought it into effect, and at the same time to say a word or two in relation to the many spheres of international work which will be involved.

The Bill sets in motion a number of involvements, such as a closer tie for us with Asia. It will give to our people what might be described as a confidential look at certain planned projects for this area. The Bill involves Australia, and the people of Australia, with all the other countries in the area under discusion. So we involve ourselves with probably the largest of all continents in the world. Asia has, 1 think, in the vicinity of 52 per cent, of the world’s population. In saying that, I should also mention that it is an area which, in many parts, lacks stability as we understand the word. Its population varies in density in certain parts and, of course, there is a degree of tension between certain areas. In other areas there is a dependence on outside powers. Throughout the region there is a complexity of races, cultures and religions. I understand that most of the world’s major forms of religion and philosophy have strong expression in the Asian area.

It is against this background that research and inquiry have been conducted and the whole pattern of the Asian Development Bank has been developed. We are left with the impression that it is a fairly formidable, indeed a fairly difficult, background. I emphasise this because, as the Bank emerges, I think we can display a strong measure of optimism. It is to their credit that so many people are prepared to give so much practical help so that the Asian Development Bank may be of major assistance and may make a valuable contribution to meeting the needs which it has been designed to meet.

The establishment of the Asian Development Bank is not a new development. A number of helpful agencies and funds have been in operation over the years. Most honorable senators are aware of food programmes and other programmes for general aid and assistance. The Economic Commission for Asia and the Far East does not come into this category, but it is one of the international agencies which have been established for the mutual well being of a large number of countries, lt consists of 21 regional members, 5 non-regional members and 2 associate members. Together they make the long list which Senator Benn read and which there is no need for me to repeat. Over a period the Commission planned and developed the charter of the Bank. It submitted that charter at Bangkok in November last. Documents and other material relating to the establishment of the bank were signed at Manila in December, The Minister has said that the Bank has the financial backing of nearly all the countries in Asia and the Far East. It is important to emphasise that it has been established as a result of Asian initiative and that it reflects a strong desire on the part of Asian countries to improve their general economic position and standard of living. President Johnson, in a message relating to the establishment of the Bank, described it as being a necessity, and not a luxury, in a war’ torn area of the world. He said that because of his urgent belief that the works of peace in Asia were vital to peace in the entire world, the United States was ready and willing to join in with the Asian Development Bank.

Australia’s contribution will amount to SUS85 million. The United States will provide $200 million, and Japan will provide a similar sum. Such a contribution from Japan highlights, not so much its emergence as a nation, but its stability within the area of operation of the Asian Development Bank. Three-fifths of the total capital is to be subscribed by the regional members of E.C.A.F.E. At Manila they made pledges which exceeded their quotas. Surely this proves that among the underdeveloped countries there is an awareness of their own position and of their need to improve their position. There is an awareness thai they must endeavour to carry a large part of the burden themselves - that they must be prepared to contribute towards the cost and generally to embark upon a strong self help programme.

I do not think it is saying too much to say that we are proud of the Bank and are glad that it is the subject of a bill which is designed to give parliamentary authority for our contribution to its capital. Any agency of this kind will have its problems. Some of them will be related to its internal working and others will be related to its general influence. Critics have pointed out that, whilst the Bank may help to close the gap between the rich and the poor nations, it could possibly contribute indirectly to some inequalities within the underdeveloped countries themselves. In reply to this criticism, those who have spoken in support of the Bank have pointed out that in the charter of the Bank there is an emphasis on what is called regional development. The Bank will be empowered to create a special fund for various projects, some of which may need longer terms and lower interest rates.

At the beginning of my remarks I referred to the links that have been established with

Asian countries and other countries. These links have been established in the provision that money from a loan for a development project may be applied to goods and services that are provided by member countries. As the Minister has pointed out, a special opportunity has been provided for Australia to tie the local currency portion of our subscription to purchases of Australian goods and services for use in Bank financed projects. Surely this will give us a double benefit. Many countries should have an opportunity to use Australian goods and services in the near future. In the current issue of “ Overseas Trading “ special reference is made to this kind of thing, particularly in relation to India.

Australia is familiar with the pattern of international assistance and co-operation. The Minister has referred to the fact that assistance amounting to $840 million has been given since World War II. To this sum must be added the sum of $121 million which represents $11 for every Australian, being given in 1965-66. Many voluntary agencies also have been busy. One which is well known to honorable senators and which has been widely supported is the Freedom from Hunger Campaign. Another such project was a three year programme involving the expenditure of SI 80,000 to improve the living conditions of rural families in Malaysia. 1 have in mind also a three year training farm programme for young men in India involving the expenditure of $100,000, the expenditure of $46,000 in Ceylon on the installation of modern equipment to combat poultry disease, and other projects which are in train for the Philippines, Thailand and New Guinea.

The Asian Development Bank is not a charitable organisation, as we understand the term. 1 merely mention this to convey the climate of Australian opinion. We have a desire to help and to see people help themselves. The Australian community will welcome the establishment of this financial and commercial undertaking. This organisation is a bank. By contributing to it, Australia has joined in the world banking structure. We will be involved directly in the sponsoring of projects through the Bank. The Bank will negotiate with the great banking structures of the world, including those in the United States, Europe and Switzerland. This joint exercise will establish an atmosphere of confidence and stability throughout the area concerned. This confidence will be manifest throughout the world of international finance.

If we had the time, I would like to discuss the relations that will emerge between the Asian and the Pacific groups as a result of the normal banking business and commercial practice of this organisation, and in particular to deal with the situation as it will affect India. To my mind, India is a kind of hinge between Australia and other areas of common interest. It will be seen that there are many facets to the establishment of the Asian Development Bank which will be of benefit to those concerned without involving a continuance of charity, which is not always in the best interests of the parties involved. So the Bank goes forward as the best instrumentality that we have yet seen established for international finance and development. I said a moment ago that the provision of this finance is not a handout - is not charity. The well developed nations will be glad to help, and the underdeveloped nations will be glad to receive assistance with a knowledge of its value. Charity sometimes has an undesirable element. The best way for one country to help another and for underdeveloped counties to develop is for the underdeveloped countries to have a source of finance such as this Bank. Access to such a source involves the underdeveloped countries in accepting responsibility and, of course, it involves us in accepting responsibility. We wish it well. In the words of the Charter, the Bank is established to promote investment, to utilise resources, to meet requests from members, to provide technical assistance, to extend co-operation, and to undertake such other activities and provide such other services as may advance its purpose. For these and other reasons, I have very much pleasure in supporting the measure which is before the Senate.

Senator HENTY:
Minister for Supply · Tasmania · LP

– Senator Benn raised a question in relation to the auditors of the Bank. I am advised that these have not been appointed. Following the practice of the World Bank, once the Board of Governors - to consist of one representative from every member country - is appointed, it will proceed to appoint an independent auditor to the Ba.,k. Senator

Bishop asked about taxation. This is somewhat technical and the Department has suggested that I put the answer in the form of a letter to the honorable senator. If that is suitable to him, 1 shall see that it is done and shall send the letter as soon as possible. J thank the Senate for its reception of this legislation.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 988

INTERNATIONAL WHEAT AGREEMENT (EXTENSION) BILL 1966

Second Reading

Debate resumed from 5th May (vide page 807), on motion by Senator Anderson -

That the Bill be now read a second time.

Senator MCCLELLAND:
New South Wales

– As the Minister for Customs and Excise (Senator Anderson.) said in his second reading speech in introducing the measure, this Bill is designed to seek the approval of the Parliament for the signing and acceptance by Australia of the Protocol extending the International Wheat Agreement 1962 for a further year. As the title of the Bill indicates, this is not a new Agreement but an extension of the one introduced in 1962. Because we of the Opposition do not oppose the Bill, my remarks will be very short. The first International Wheat Agreement Bill was introduced into this Parliament by the honorable member for Lalor (Mr. Pollard), when he was Minister for Commerce and Agriculture in the Chifley Labour Government. That Agreement existed, I think, for some four years, lt was renewed by the present Minster for Trade and Industry (Mr. McEwen), when he was Minister for Commerce and Agriculture in 1953, and again in 1956, 1959 and 1962.

The Agreement of 1949 provided that five countries would be signatories to the Agreement as exporters, these being Australia, Canada, France, the United States, and Uruguay. At that time, 37 importing nations were involved. At the time of the last Agreement in .1962 the number of exporters had jumped from 5 to 10. In other words, 10 countries were signatories as exporters to the 1962 Agreement, namely, Australia, Argentina, Canada, France, Italy, Mexico, Spain, Sweden, the Union of Soviet Socialist Republics and the United States of America, but the number of importing countries, which had been 37 in 1949, diminished to 31. Basically, that is the situation today. The Agreement provides that a specific quantity of grain is permitted each exporting country and the purchase of a certain quantity is the obligation of importing nations. This type of arrangement has existed for the past 17 years.

Apart from the variation in the number of exporting nations and the number of importing nations, in principle the Agreement which is the subject of this Bill is much the same as the Agreement of 1949. If. empowers the International Wheat Council to make an annual review of the world wheat situation, including the international implications of national policies in respect of world wheat production, stocks, marketing arrangements and, of course, the disposal of wheat surpluses on non-commercial terms. The terms of the previous Agreement provided that it would expire on 31st July 1965. As I understand it, it is customary to renegotiate the Agreement prior to the expiry date, but because most of the trading countries of the world were at that time already engaged in the Kennedy Round of trade negotiations in Geneva, it was agreed by the International Wheat Council that the existing Agreement be extended by one year, hence, as the Minister said in introducing the Bill, the measure now before the Parliament. The Minister went on to say -

It was expected that if comprehensive arrangements to regulate trade in cereals, including wheat, could be negotiated they would make redundant an International Wheat Agreement of the present type.

There is some note of optimism on the part of the Minister that the negotiations will bear fruit. I and other members of the Opposition sincerely trust that they will. But the Minister has said that to date negotiations have been slow. In view of this it is probable, in our opinion, that the wheat producing nations will have to fall back ultimately on the protection of the International Wheat Agreement.

Tt is not necessary for me to point out that this measure is important to Australian wheat growers and that the wheat industry is important to this nation. After wool, wheat is Australia’s principal export. Last financial year it was worth something of the order of $280 million to this nation. Australia and all the other exporting nations involved in this Agreement provide food for a great many people who otherwise would starve. Because of the stability that this legislation gives to the Australian wheat farmers for a further period of .12 months, we of the Opposition do not oppose it.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 989

INCOME TAX (INTERNATIONAL AGREEMENTS) BILL 1966

Second Reading

Debate resumed from 5th May (vide page 864) , on motion by Senator Gorton -

That (he Bill be now read a second lime.

Senator CANT:
Western Australia

– This Bill is purely a machinery measure which is designed to change the word “ pounds “ wherever it appears in section 16 of the principal Act to “ dollars “. The Opposition does not oppose the Bill.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 989

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1966

Second Reading

Debate resumed from 5th May (vide page 865) , on motion by Senator Gorton -

That the Bill be now read a second lime.

Senator CANT:
Western Australia

– The main purpose of the Bill before the Senate is to amend the Sales Tax (Exemptions and Classifications) Act. Although it has several purposes, I think the chief one is to implement the New Zealand-Australia Free Trade Agreement as it applies to fruit juices and works of art. The Agreement provides that goods imported into Australia from New Zealand shall not bear a rate of sales tax greater than the rate that is levied on comparable Australian goods. It also provides that honour boards on which are inscribed the names of persons who have served in the defence force or in any other armed forces shall be exempt from sales tax. The provisions in relation to films were amended in 1965 but apparently the amended provisions did not meet the Government’s wishes. So opportunity has now been taken to bring the provisions into line with the Government’s wishes.

There is a provision that Australian made motor vehicles may be purchased by members of the United States and United Kingdom forces free of sales tax. I want to raise one question with the Minister. Clause 4 (13.) relates to -

Motor vehicles for use by members of the United States Forces, in such cases or circumstances as are prescribed.

However, clause 4 (14.) refers to -

Motor vehicles for use by members of the armed forces of the Government of the United Kingdom serving in Australia, in such cases or circumstances as are prescribed.

The sub-clause relating to members of the United Kingdom forces contains more words than does the sub-clause relating to members of the United States forces. The difference may be covered by the Status of Forces Agreement - I do not know - but it seems to me that conditions are imposed on members of the United Kingdom forces which are different from those imposed on members of the United States forces.

The Bill goes on to deal with imported goods the produce or manufacture of Australia, being goods other than motor vehicles or parts for motor vehicles, and reimported goods. These also are exempt. There are four different clauses which prescribe amounts of money in pounds. These are to be changed to amounts in dollars. 1 think the most important exemption provided for in the Bill is covered by clause 4 (2.) which relates to -

Gas that is commercially known as coal gas, and any other gas that is supplied to the public through a system of reticulation and is of a kind ordinarily used for a purpose similar to any purpose for which coal gas is used.

The Act provides that only coal gas shall be exempted from sales tax. It is known that other gases have been used for domestic purposes for a number of years. Coal gas has been mixed with petroleum gas and this mixture has been used. In various parts of Australia substantial quantities of natural gas have been found, and this will be included in the gases to be exempted. We of the Labour Party are not happy about the incidence of sales tax. We oppose indirect taxes because we consider that they bear unequally on members of the community. We must remember that sales tax is applied to all goods produced in Australia or imported into Australia, with the exception of the goods that are mentioned in the Sales Tax (Exemptions and Classifications) Act. When sales tax is imposed on certain types of goods, the same amount of tax is paid by each user of those goods. Anyone who purchases those goods, whatever his financial circumstances and whether he can or cannot afford to pay the tax, has to pay it. In these indirect taxes there is no principle of ability to pay. We say that that is quite wrong. The Budget for this financial year is designed to produce about $400 million from sales tax. That is a rather large impost on the people by way of indirect taxation which does not bear equally on members of the community in accordance with the ability of the consumer to pay.

We do not oppose this Bill, but we do register our protest against the Government’s action in continuing to impose these sorts of taxes on the people without taking into consideration their ability to pay. We say that it is time the Government recast its thinking on indirect taxation compared with direct taxation. The rates of direct taxation are graduated in order to equalise, as nearly as possible, the burden that is imposed on the people, although the rates of direct taxation do require a considerable amount of revision. But direct taxation is levied in accordance with ability to pay, whereas indirect taxation is not. For those reasons, whilst we are opposed to the incidence of indirect taxation, we do not oppose this Bill.

Senator HENTY:
Minister for Supply · Tasmania · LP

– in reply - Senator Cant raised a question about the United States forces and the United Kingdom forces. We have an agreement with the United States which refers to members of its forces serving in Australia. So a reference to members of the United States forces means members of those forces under that agreement who are serving in Australia. But we have not a similar agreement with the

United Kingdom. Therefore, we had to add the words “ serving in Australia “ in the sub-clause relating to members of the United Kingdom forces.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 990

LOAN BILL 1966

Second Reading

Debate resumed from 10th May (vide page 873), on motion by Senator Henty - That the Bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The purpose of this Bill is to authorise the borrowing of $150 million for defence purposes. The money may be raised under the Commonwealth Inscribed Stock Act or by way of treasury bills issued through the Reserve Bank of Australia. This Bill stems from the Budget introduced last year by the present Prime Minister (Mr. Harold Holt), who was then the Treasurer. At that time it was expected that the excess of expenditure over revenue in the current financial year would be about $111 million; but it was thought that moneys raised on the loan market would be adequate to meet that deficit. It now seems that that expectation will not be realised. The purpose of this Bill is to authorise the raising of money to enable the gap to be filled. The money will be applied solely to defence purposes. I shall come to the reason for that presently.

There is a reason for the change in that, as the present Treasurer (Mr. McMahon) has pointed out, the Government has had unexpected commitments during the year. First of all, the Treasurer points to the fact that the drought has led to grants to the States of $26 million in the form of drought relief. Secondly, it has been necessary to meet a call from the International Monetary Fund to provide $19.8 million to meet demands on the Fund for Australian currency from both New Zealand and India. It is rather cheerful to note that those countries are drawing our currency, although such drawings mean an immediate financial strain at the governmental level. This indicates that those countries need funds to buy services or commodities from Australia.

That is an additional $19.8 million which was not contemplated when the Budget was drawn up.

Thirdly, in view of the serious drought in India, we have made a gift or offered help to India to the extent of $8 million to provide emergency food aid in anticipation of an extension of the grievous drought that has affected that country. I hope to come back to that item before I conclude. Finally, a further $15 million was made available to the States to stimulate the housing industry which showed signs of lagging and - I will not say stagnancy - of not keeping up with the demand. Those four items add up to an expenditure of $68.8 million which was not contemplated when the Budget was originally drawn up. There is a fifth item for which the Treasurer has not given any specific amount. I refer to an increase in wages and salaries which was granted by the Commonwealth Conciliation and Arbitration Commission and extended to members of the Commonwealth Public Service, the defence forces and the Post Office staff. I ask the Minister for Supply (Senator Henty), who represents the Treasurer, to tell us what is the estimate of the amount involved there, if he has that information. 1 should think that by this time it would be readily available. That is additional expenditure with which the Treasury has been faced since the Budget was drawn up.

On the revenue side, it turns out that in this financial year less will be received than was expected. That reverses a trend that has marked most of the last 20 years. We are relying on the natural expansion of the economy, increased numbers going into employment and the type of development that must take place in a young and growing country which is absorbing and employing in its work force new elements from abroad. That feature has been quite conspicuous throughout governmental budgetary arrangements during the last few decades. It occurred even during the war period. So it is rather disturbing to find that that trend is reversed and that revenue receipts are not keeping pace with the normal healthy development of our country as might be expected.

Although the loan proceeds available to the Commonwealth planned by the Loan Council are likely to be greater than antici pated, there still will be a cash deficiency this year. The Treasurer goes on to point out that there is to be a cash and conversion loan this month. The result of that loan cannot be anticipated with certainty. He also points out that a very considerable portion of total income tax collections is still to come in. The Treasurer said - lt is not yet possible to estimate with precision the final Budget outcome for the year.

He then made a very tentative estimate which rather surprises me. He pointed out that he is compelled to borrow an amount which is designed to cover the largest deficit which might occur. He said - 1 estimate that the actual deficit will be less - and perhaps a great deal less - than the figure of St SO million which, at this stage, I consider it prudent to seek authority to borrow.

I repeat that the Treasurer is proposing to borrow £75 million. That is a very tentative estimate. In my experience of the Treasury and the Taxation Branch down the years, with all the resources at their disposal they have been able to make very precise estimates of the budgetary results. The Treasurer seems to be playing very safe in seeking to raise an additional £75 million. It surprises me to see how much elbow room he has left for himself in determining the amount to be borrowed.

I indicated, as the Bill provides, that this money is to be applied for defence purposes. That does no more than represent what the accountants term a journal entry in the books of the Commonwealth, because the expenditure to date unquestionably has been debited against Consolidated Revenue. It will be merely a journal entry to transfer a portion of that amount and debit it against the Loan Account when the loan is raised. The reason for that is clear to those people who understand the financial powers of the Commonwealth, particularly the provisions of the financial agreement. The agreement provides that moneys required for defence purposes do not come under the control of the Loan Council. From the viewpoint of the security of the Commonwealth, right from the beginning it has been recognised that there the Commonwealth must have a paramount right to raise money on the loan market without consulting the States. So this loan does not go to the Loan Council for approval. The Commonwealth may borrow the amount without consulting its colleagues on the Loan Council and may appropriate the money for defence purposes. The title of the Bill indicates that the money is borrowed for defence purposes, so that the Commonwealth is not cluttered up in the approach to the market and the decision as to the amount to be borrowed by any kind of reference to the Loan Council.

The whole position will come up for review in a few months time when the Budget for the next financial year is before us. It will be quite interesting to see how near the Treasurer was to the mark in borrowing £75 million. The usual practice is that he finishes with a very substantial surplus. He will not show a surplus, because the practice under this Government is to transfer whatever surplus otherwise would exist to a Loan Consolidation and Investment Reserve Account, where in turn it is available to supplement State programmes, and to make loans to the States. It is quite a fascinating account that has attracted a lot of comment from me down the years. I do not seek to amplify that on this occasion.

I come back to what I have termed the down turn in the economy as reflected in the fact that the Government’s revenues are down for the financial year. The down turn in the economy appears in many significant elements. For example, the housing industry has had to seek assistance from the banks, and through direct grants to the States. The motor car industry is in something of a slump. There has been a very substantial fall in the production of furniture and household goods. A lot of these trends can be attributed to the Budget which the Government presented for this financial year when it raised £78 million extra by both direct and indirect taxation, the great bulk of it being raised by indirect taxation at flat rates on the purchases of goods that are most commonly used - petrol, liquor, tobacco and things of that kind. All these factors, combined with an increase of 2½ per cent, in income taxation have helped to drain off purchasing power and accordingly to dampen down demand and, in turn, to dampen down production. It is quite fitting to those who address their minds to the States’ economies today to see a general slackening and dampening in many of the key factors. It is to be hoped that the Government will note these influences and will not delay too long in seeking to rectify them.

I do not think it is appropriate at this stage to develop the theme any further. I indicate that we are not opposing the granting of authority to the Treasurer to raise the sum of £75 million. We shall look with very great interest to the actual deficit which this Bill is designed to cure. I shall look with particular interest to the amounts that ultimately will be transferred out of Consolidated Revenue to the Loan Consolidation and Investment Reserve Account.

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without amendment or debate.

page 992

FINANCIAL AGREEMENT BILL 1966

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator HENTY:
Minister for Supply · Tasmania · LP

– I move-

That the Bill be now read a second lime.

The object of this Bill is to ratify an Agreement between the Commonwealth and the States amending the Financial Agreement to permit it to operate in decimal currency. The Agreement was signed by the Prime Minister (Mr. Harold Holt) and by the Premier for each State before the changeover to decimal currency and became effective on 14th February 1966. The Financial Agreement of 1927 was ratified by the Financial Agreement Act 1928 which also contained certain appropriations and provisions relating to expenditure of loan proceeds to enable the Commonwealth to carry out its obligations under the Agreement. This Bill amends the Financial Agreement Act 1928 to ensure that these clauses will apply to the Agreement as amended.

The amending Agreement has been drafted to permit reprinting of the Financial Agreement so that it can be easily read in terms of decimal currency, even though some of the money references apply only to the period preceding the introduction of decimal currency. The Agreement itself relates solely to the changeover to decimal currency and is of a routine character. I commend the bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 993

ADJOURNMENT

Immigration

The PRESIDENT:

– Order! In con formity with the sessional order relating to the adjournment of the Senate.I formally put the question -

That the Senate do now adjourn.

Senator McMANUS:
Victoria

.- I apologise for detaining the Senate at this late hour but, as we are approaching the end of the sessional period, I am afraid that if I do not speak now I may not get an opportunity to do so later. I want to refer to some remarks made by Senator Cavanagh when we were discussing an immigration matter about 10 days ago. On that occasion he read extracts from a document which he said indicated that the immigration authorities may have -I emphasise the words “ may have “, because he did not say it categorically - allowed certain Latvian war criminals to come into Australia. He read from the same document details of crimes that these persons were alleged to have committed. I want to emphasise that he did not personally vouch for the truth of the statements made. He said that he was making them for what they were worth and, because he had nothing before him except the statements themselves he said he would not name the persons referred to.

I was very concerned over these statements, first of all because I have a high regard for the reputation of our immigration procedures and, secondly, becauseI have many friends among the Latvian people and I felt that, to a degree, the whole Latvian community might be under a cloud while these allegations remained unanswered. I therefore contacted persons whom I thought could speak for the Latvian people. I spoke to the Consul for Latvia, because at present we have relations with the Latvian Government - I presume the Government in exile - and to representatives of Latvian national groups.

I was very interested in the questions Senator Cavanagh raised regarding these alleged war criminals - again I emphasise that he did not say they were war criminals, but that there appeared to be statements about them - because whenI was in the Senate some years ago, attempts were made by the Soviet authorities to have certain alleged criminals extradited from Australia for trial. On that occasionI moved the adjournment of the Senate and said that if the allegations were proved by evidence I would have no interest in those people other than to see that they had a just trial, but that I believed we should adopt the attitude that unless there was proof we must regard them as innocent. I notice that the Attorney-General (Mr. Snedden) has been at a conference of Commonwealth law authorities in recent days, at which the question of extradition came up, and in view of the concern of migrant groups over this question I hope he will take an early opportunity to let us know what happened at that conference.

The document from which Senator Cavanagh quoted is entitled “ Daugavas Vanagi “. Daugavas is a river in Latvia and Vanagi is the Latvian word for falcons, so the title means “ The falcons of Daugavas “. This paper or journal was originally published by a group of Latvian anti-Communists for the purpose of attacking Communism throughout the world. The document from which Senator Cavanagh quoted has exactly the same name as the other one and has exactly the same format, except that the anti-Communist journal which was published originally has on the cover the picture of a falcon holding the head of a bird, while the one which the Communists have published in opposition to and imitating the anti-Communist paper has on its cover a falcon holding in its talons a human skull.

How did this happen? It happened in this way: The Latvian community wishes it to be understood that although the paper published by the Communists is alleged to be published by the Latvian state publishing house, on the contrary, the Communist journal is not Latvian; it is not published by a State institution and it is not published by a publishing house in the sense that we understand the term. The Latvians point out that in the postwar period the Red Army, which is an instrument not of Latvia but of the Soviet Union, set up in East Germany an organisation of psychological warfare. That is the organisation which for some years has been jamming our Post Office with all kinds of journals addressed to New Australians in this country, telling them that the Soviet Union is a paradise, and attacking the leaders of those migrants in this country who are opposed to Communism. Originally this Red Army psychological warfare unit was controlled by a Red Army colonel, but later it was upgraded in importance and it was put under the command of a full general. Beginning at first in East Germany it established branches at Tallinn in Estonia, at Riga in Latvia and at Vilnius in Lithuania. 1 point out that the Latvians are quite definite that this opposition journal is not Latvian, because it is published by the Soviet authorities; it is not a State publication, because it is under army control, and it is not published by a publishing house in the sense in which we understand it, because it is published for distribution not in Latvia but in the outside world in an endeavour to combat the propaganda of the anti-Communist Latvians. The method employed by this organisation is first of all to publish, without evidence, smears on Latvians who are prominent in their national groups in the outside world. They always try to pick out those who are conspicuous for opposing Communism and they try to embroil them with the Jewish people by alleging that they are guilty of anti-semitism. In view of the evidence that we have heard in the past few years of anti-semitism by the Soviet authorities, it is remarkable to find them accusing other people of anti-semitism.

In my view and in the view of the Latvians this book and similar types of journals which the migrants have complained have been sent to their homes ought to be banned by the Post Office. They frighten many of our migrants, because it seems to them that if people can send them these publications without them having been ordered it means that the hand of the Red big brother is still on them; that libels can be published without any redress, because the persons attacked can take no action in the courts of the Soviet Union to defend themselves. I suggest again therefore that this type of publication should be examined by our postal authorities because Latvians in this country who have been excellent citizens are being libelled in this document which is being sent to people who have never ordered it. lt is being sent not by any Latvian state publishing house, but by the Red Army, as part of the work of its division of psychological warfare.

There was also some reference to Croats. I am jealous of the reputation of our immigration authorities. I will not go into great detail about this matter. I do not think that we should condemn the Serbs, the Slovenes, the Croats or the Albanians who constitute the country of Yugoslavia because there are four different racial groups there. Wc should not condemn them, but we should condemn the people who, without the consent of many of them, forced them into a country to which they did not want to belong. They were confronted wilh problems concerning race and religion that were almost insurmountable. We should blame the diplomats and the people who made the peace treaties and brought this kind of country into existence, if these people cannot gel on together now. 1 agree with Senator Mulvihill that, as a result, we do not want violence and trouble in this country. But 1 point out to him that generally the Croats today feel that they are under a cloud as a result of what has been said. They have pointed out that the overwhelming majority of Croats in this country were too young to have been engaged in the Fascist activities of the Ustashi. They have stated that in Victoria where a lot of prominence had been given to alleged troubles, the police held an investigation which revealed that there was a small group of extremists active in these matters but that the actual troubles were much exaggerated. I think that if less publicity was given to this kind of thing and if it was realised that the overwhelming majority of Croats and Serbs in this country are not engaged in this sort of violence, it would be much better. Let me give an example of the kind of stuff that is turned out.

I have seen a statement that a number of young Croats who had gone back home had attempted to get over the border but were seized as soon as they made the attempt. I have seen a statement by a gentleman associated with the Labour Party in Victoria, in which he said that he went to Yugoslavia and saw the depositions which had been taken from these people. The allegation was made that they were trained in assassination, bomb throwing and terrorism in my office in the Australian Democratic Labour Party rooms in Melbourne. J merely say to honorable senators chat when we find people who are prepared to descend to that kind of allegation, the only conclusion to which we can come is that they will say anything about anybody. I want to point out that the Croats in this country are lawabiding, as are our other citizens.

Senator Cant:

– Some of them are.

Senator McMANUS:

– Some of them are, but why brand a whole group of people because a few are extremists?

Senator Cavanagh:

– Why not deal with them?

Senator McMANUS:

– The police in Victoria have dealt with them. The police say that the number of cases is so small that the whole position has been gravely exaggerated, and the police are impartial people in this matter. .1 conclude by saying that we cannot expect a man who comes here from a country in which there are grave national differences completely to submerge his nationalism. I conclude by repeating what Bernard Shaw once said -

Nobody … of any intelligence likes nationalism any more than a man with a broken leg likes having it set. A healthy nation is as unconscious of its nationality as a healthy man of his bones. But if you break a nation’s nationality, it will think of nothing else but getting it set again.

Senator CAVANAGH (South Australia) [1 1.51. - lt would not be expected that Senator McManus and I would agree on many things. But I am not being critical of his speech tonight, although he sought to reply to a statement that I had made. I agree with him that the foreigners about whom we have reason to be concerned are few when compared with the total number of migrants, but they are not so few that we should ignore the points that I have made. Four innocent victims were stabbed at Whyalla in South Australia. Should we ignore this? 1 am not condemning new Australians because of their past political activitivies or their country of origin. I am condemning a section which is bringing its Fascist tendencies into Australia. Senator McManus did not seek to defend them, but he said that they were so few that we should ignore them. In my address in the Senate recently I referred to a case in Queensland in which a man had been found guilty by a jury of Australian citizens, on the evidence presented, of being a war criminal and not fit for Australian citizenship. In the other instance to which I referred, four men were stabbed at Whyalla. The evidence showed that a political row had originated concerning the Croatian movement.

Senator Cormack:

– What evidence?

Senator CAVANAGH:

– The evidence of their conviction in a police court.

Senator Cormack:

– For what?

Senator CAVANAGH:

– For stabbing four men.

Senator Cormack:

– That was all the evidence?

Senator CAVANAGH:

– When 1 produced this evidence recently Senator Cormack interjected on that occasion. I referred to the evidence as reported in a newspaper. The report stated that one of the defendants said he would not take the oath and that -lie wanted to swear to King Peter, to the Serbs and to the Croatian movement. The prosecutor objected and said that the defendant was endeavouring to introduce political propaganda into the hearing. All the evidence points to the fact that an investigation needs to be made of a section in Australia. I have never said thai any section needs expulsion.

On the previous occasion I referred to a publication. I am informed tonight that it was a publication of the Red Army. 1 do not know whether it is or not. It was given to me by a naturalised Australian, who was previously a Latvian. She received the publication from her mother who is now residing in Latvia. That was the source of my publication. I informed honorable senators that they could attach to it whatever suspicions they wished. We have been told tonight that it comes from the Red Army. When I referred to the publication. I informed honorable senators that it was available for perusal. If it is the same publication as the one to which Senator McManus referred tonight, it may be perused in my office at the present time. Not only does it accuse certain people who are living in Australia, but it also contains photographs of them in the uniform of the Security Service of the Latvian army. It contains signatures on certificates, which certify to the death of certain Latvian civilians at a particular period. The publication contains the whole record of these people. Because 1 was not prepared to condemn them, I did not disclose their names. But their names and addresses in Australia are listed in the publication.

This is where 1 differ from Senator McManus. If there are war criminals in Australia - it does not matter if there are only a few - we are entitled to ask: How did they get here and why are they permitted to remain here? I ask that the authorities responsible for inquiring into matters of this sort inquire into this publication to see whether there is any truth in it. I put it no further than that. 1 do not say there is truth in it. I do not uphold that these mcn committed these crimes. The question is whether or not the Department of Immigration will inquire into the matter to find out whether there is any truth in it, no matter what the source of the publication is. Can Senator McManus. object to that proposal? Can he object to finding out whether we have in Australia someone who was responsible for the prosecution and death of hundreds of Jews and hundreds of his own national civilians during this particular period? I have never said that these people are guilty. I have never disclosed the name of this person. It will be disclosed some day if the Government is not prepared to initiate an investigation. All I ask is that there be an investigation into this matter. Will Senator McManus say that these things that I have alleged, having been revealed in a publication which I cannot vouch for, should not be inquired into? Will the Government say that they should not be investigated? Is the Government prepared to carry out an inquiry to see whether we are bringing to Australia members of Fascist organisations who are prepared to continue with their Fascist tendencies in Australia and not integrate into Australian society?

Senator MULVIHILL:
New South Wales

.- I do not like to delay the Senate at this late hour but I want to deal with the remarks made by Senator McManus in relation to the Yugoslav community. Like most stories, this one also has a beginning. I want to start by saying that my association at the trade union level, and subsequently at a political level, was largely with the Slovene people. It is unique to look at this situation through their eyes, as Senator McManus will appreciate. These people have the same religious background as Croats, virtually. I direct my next remarks particularly to Senator McManus. I refer to the 1953-54 period. I have some diffidence about making this admission to the Senate but I found myself on thin ice with members of my own party in writing a letter to the “ News Weekly “ refuting a thesis put forward in that publication at that time. I say that deliberately. One of its alleged historians argued that the Yugoslav situation would have been a lot better if World War I. had not occurred and the Hapsburg empire had continued. To develop the story further, again it is remarkable that at that time there was an emperor of the same belief as the Slovene people, but his government endeavoured to smash the Slovene culture completely.

The point I am making is that if any honorable senator has any idea that this is largely a sectarian conflict then that is not the be all and end all of the matter at all. Now, to bring us to the Australian version of the story: Again, I am referring to these pressure groups. The bulk of the Slovene people who came to Australia were, in the main, concerned with developing a new life here. They had no real left wing tendencies. At the same time they were not unaware of the fact that some people had illusions about overthrowing the Tito Government and establishing some form of monarchy or some other form of government in that country. As a result they said: “ A plague on both your houses.” But what do we find over the last five years? Whether it be at a football match or at some other function we find some of these Croat people gatecrashing and demanding to say that they hate the Yugoslav Government or something like that. If other people at the function said that they were not interested they were told: “You are Tito stooges.” I have been to football matches with friends of mine where the women have been accused, in Slovene, of being Tito bitches and other expressions much stronger than that.

This was my problem: Many of these people said to me: “ All right. Why cannot we attack them in return? “ I had no illusions about this and realised that there could be a manslaughter case and that some of these middle of the road Slovene people could be accused of attacking the others. They could be accused of being Communists and of indulging in left wing thuggery.

That was the situation in New South Wales about the time Bob Heffron was the Premier of that State. I took two deputations to him and, subsequently, the Commissioner of Police was called in. The Special Branch of the New South Wales Police Department made investigations. I know very well that very strong submissions were made to Colonel Spry and the people in Canberra about doing a little bit more and not being so partisan when screening migrants. The people here were asked to say to these people, when attending various functions: “ By all means have your meetings but keep apart.” As far as New South Wales was concerned, no Yugoslavs connected with the centre or the left wing intruded into any Croatian right wing functions. That was not done. Very strenuous efforts were made by a host of people - my Deputy Leader, Gough Whitlam and others - who asked these people to have a little bit more commonsense and to act with restraint.

But it is pretty hard to maintain that sort of situation. These facts can be backed up by any person who likes to check with the New South Wales Police Department. There were at least two functions in the Paddington Town Hall where some of the ultra-right wing groups heaved beer bottles from the top alcove or threw eggs and stink bombs into the crowd. Again I repeat the tribute that must be paid to the Special Branch of the New South Wales Police Department. They arrested particular people and took them from the meeting. These people could very well have been battered.

These particular functions are unique to this extent: These people make it a practice of having at these functions anybody from a child of eight or nine years to grandmothers and grandfathers. In such a crowd there only has to be a panic for people to be hurt. I make no bones about the representations that were made through the State Premier to the Commonwealth authorities. But what happened? Nothing happened until a gentleman by the name of Lesic was, to quote my Deputy Leader, Mr. Whitlam, again, hoist with his own petard, He was carrying a bomb in a suitcase. It is just as well that the retribution happened to him and not to innocent people in public transport. I repeat that deliberately. It has never been disproved. One of the first questions”! asked in this chamber was whether Lesic was being naturalised and I was told: “No.” I was told he would not be naturalised or that his naturalisation was being delayed. The proof of the pudding is in the eating. Again, I throw that challenge out. I know that Mr. Opperman, the Minister for Immigration, would not question that this is proof beyond doubt that the right wing people started this trouble. I agree with Senator McManus that this trouble is certainly not caused by the entire Croatian community. But I repeat that the Commonwealth Government for a long time refused to recognise this.

I pay tribute to the last immigration legislation we dealt with in this chamber because at long last when Slav migrants are being screened they are asked whether they have had any affiliation with the Ustashi movement. I know that in some quarters they feel that the movement is anti-Communist and that it is all right. Let us be honest with ourselves. Anton Pavelic was an out and out collaborator with Hitler and with Fascist powers. I am one of those people who say that if teenagers come to Australia from any country then let them make a fresh start. But there is an obligation on them to stop the various agitations that go on.

I have argued that there has been a period in which there has been a thawing out process. I believe in giving credit where it is due. I knew that Senator Gorton and Mr. Opperman, and I think Senator McManus as well, appreciate this viewpoint for why else would the Commonwealth Government recently have opened up an embassy in Yugoslavia? I know that this matter is linked with world politics and the fact that in Europe, in contrast to Asia, there has been a thawing out between left wing governments. Let us come back to the local scene. I could not appreciate very well having Colonel Spry at the bar of the Senate. I think that at the same time it is well known amongst Communist Party circles - and it has become rather a joke in trade union circles - that these groups never forgave Tito. He was a deviationist. But so far as new Australian groups are concerned, I could name other groups of people in which there is a higher percentage of Communists than there is in the Yugoslav community.

I conclude on this note. I know that Senator Cavanagh has dealt with the Baltic situation. But so far as the Yugoslav community is concerned there has been a serious period during which these feuds have developed. Speaking for New South Wales, I can say unreservedly that all these unfortunate incidents did stem from some minute group of hot-headed Croatians. But they were not based on a sectarian issue. I have worked with some of these people since 1952 and 1953. They are moderates. They have come to me and advised me on the situation. They are all people who have been naturalised without any hitch whatsoever. If anybody is implying that I am the stooge of some devious group, well there is the proof that I am not.

Senator McManus and I have had a number of verbal clashes on this subject. I hope this will be the end of the matter for all concerned. I think I have been vindicated by the action of the Holt Government and the diplomatic exchanges that have taken place. If Australia has been charitable in regard to Yugoslav migration and has admitted people who had an affinity with Ante Pavelic, perhaps in the next wave of migrants we will get some who are more of the proletarian militant persuasion. I do not use the word “ militant “ as being the prerogative of any particular group. I refer to people who adopt more of a progressive -centralist approach. If we get some of those people, their entry will redress the imbalance of which I and others have been critical. I believe that we are entering a new age in regard to the assimilation of Yugoslavs and that the views of Senator McManus and myself perhaps will be rationalised.

Question resolved in the affirmative.

Senate adjourned at 12.1a.m. (Thursday).

Cite as: Australia, Senate, Debates, 11 May 1966, viewed 22 October 2017, <http://historichansard.net/senate/1966/19660511_senate_25_s31/>.

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