House of Representatives
10 March 1966

25th Parliament · 1st Session

  1. House of Representatives
  2. 25th Parliament
  3. 1966

Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 10.30 a.m., and read prayers.

page 113

QUESTION

NATIONAL CONSERVATION AUTHORITY

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I ask the Minister for National Development: Does his answer yesterday to the honorable member for Macquarie mean that the Government is still opposed to the establishment of a national conservation authority, incorporating the Snowy Mountains Hydro-electric Authority, to undertake further great developmental tasks? I do not wish to cramp the style of the Minister’s answer and I hope that he has learned something from the lesson of the Dawson electorate. Can he therefore give us an answer, “Yes” or “ No “?

Mr FAIRBAIRN:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– My answer yesterday means that the Government is very actively considering at the present moment what should be the future of the Snowy Mountains Hydro-electric Authority.

page 113

QUESTION

HOUSING

Sir JOHN CRAMER:
BENNELONG, NEW SOUTH WALES

– I preface my question to the Treasurer by directing his attention to the statement of Loan Fund expenditure at 28th February 1966, which discloses that for the past eight months the total of advances to the States for housing is lower by SI. 73 million than for the same period last year. What is the explanation for the apparent inability of the States to spend money available to them at a time when the economy and the housing industry need this expenditure and when the Commonwealth is considering making more money available for housing?

Mr McMAHON:
Treasurer · LOWE, NEW SOUTH WALES · LP

– The figure that has just been cited by the honorable member is, I am sure, accurate. There has been a fall in the amount of money taken up by the States out of the total amount of Commonwealth loan housing finance. The amount approved under the Commonwealth and State Housing Agreement was of the order of $100 million for the year, and the Commonwealth expects that the full amount will be taken up during the course of the financial year. In fact, the Commonwealth is sure that it will be taken up. The amount of actual drawings on the fund is not the criterion. The criterion is the number of commencements, and finance available can fall back a little. There can be what is called delay in the actual appropriation of funds. However, much more importantly, we have been looking with great caution and care at the figures of commencements and approvals in the public sector. I am glad that the honorable member has raised this. It gives me the opportunity to mention that they have fallen substantially over the course of the last four months. The Prime Minister said in his statement to the House and to the nation last Tuesday evening that we were cautiously watching the housing position.

I have asked the Treasury to give me a full report on how we can give a quick and certain stimulus to the housing field during the next four months. The report is being prepared for me and I hope, as the Prime Minister hopes, that I will be able to make a definitive statement to the House next week.

page 113

QUESTION

DECIMAL CURRENCY BANK NOTES

Mr COPE:
WATSON, NEW SOUTH WALES

– In addressing a question to the Treasurer I direct the honorable gentleman’s attention to the position of the serial numbers on the new currency notes. They are placed in the corners of the notes. The honorable gentleman will be aware that corners of currency notes are often torn off while the notes are in circulation. This did not matter with the previous note issue because the serial numbers were printed near the centre of the notes.

I ask the honorable gentleman: What is the position if the whole or part of a serial number is missing from a new currency note? Can a claim for the full amount of legal tender be made? I spoke to a bank teller on this matter. He told me that he had not been advised as to what he should do in such a case but in the meantime he would refuse payment of the full value of a note if portion of a serial number were missing.

Mr McMAHON:
LP

– I am surprised to learn that a teller would, on his own authority and without consulting hit superiors, reject what is, after all, a validly issued currency note. I have not had the opportunity to look at the serial numbers of the new notes. I am not interested in the serial numbers; I am interested, as I suppose most others are, more in the number of notes that I have in my pocket I feel that the implication in the question asked by the honorable gentleman is wrong. Nonetheless I shall refer the matter to my Department and to the Decimal Currency Board. I shall see what can be done to ensure that currency notes, of whatever denomination they happen to be, will be accepted at their value by banks if it is obvious that they are legitimately and properly issued.

page 114

QUESTION

ORD RIVER PROJECT

Dr MACKAY:
EVANS, NEW SOUTH WALES

– I address a question to the Minister for National Development relating to the Ord River project. Is the Minister aware of a statement made recently by Sir Robert Webster in his Storey Memorial lecture to the Australian Institute of Management that natural fibres may well be faced with overwhelming competition from cheaper and possibly superior synthetic fibres in about a decade? In the light of this statement can the Minister give any assurance as to the future of the Ord “River project which is at present being planned substantially around cotton as the main cash crop? If sugar, for other reasons, is unlikely to be the substantial alternative to cotton, is there some other plan to undergird the enormous cost of this venture? Can the Minister indicate to the House any mineral or other discoveries which have been made as the result of attracting population to Kununurra?

Mr FAIRBAIRN:
LP

– I have seen the statement made by Sir Robert Webster. He sent me a copy of it. For a long time there have been allegations that synthetics would take, over from natural primary products in many fields. It is perhaps 30 years now since we were first saying that synthetics would replace wool. Wool is still with us, although synthetics are blended with it. We are crta told that there will be a synthetic to replace steak, but I think I would prefer to s’ick to the natural steak for a while to come.

For the foreseeable future cotton appears to bc able to resist inroads from synthetics although such inroads may be sufficient to force down the price of cotton. The reason why cotton is being grown more than anything else at the Ord is because it is a much more profitable crop. There are many other crops which can be grown there. Research and experimental work are being undertaken in connection with them. As an example, I mention long grain rice. The growing of sorghum is also a profitable venture at the Ord. Investigations are being carried out in many other fields such as the use of pastures for the fattening of beef cattle, the growing of oil crops and so on.

Sugar can be grown particularly well on the Ord River, but the cost of establishing a new mill is such that it is unlikely that sugar will become a main crop in the foreseeable future. The honorable gentleman asked whether there had been any discoveries of minerals as a result of the opening up of this area. I do not think we can say that it has been as a direct result of the opening up of the area that minerals have been discovered, but there have been some interesting discoveries of minerals in that area. I refer in particular to the discovery of a major deposit of bauxite not very far away.

page 114

QUESTION

ARMY RECRUITMENT

Mr REYNOLDS:
BARTON, NEW SOUTH WALES

– I direct a question to the Minister for the Army. What are the most recently available net recruitment figures for the Australian Regular Army? Do these figures show any substantial improvement in the recruitment rate? If not, does the Government propose any new measures to improve the rate, or has the Government resigned itself to relying on conscripted 20-year olds to provide an increasingly large proportion of the servicemen required to meet our greatly increased commitments in what the Government expects to be a long, protracted struggle in Vietnam?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– The implication in the last part of the honorable member’s question is quite without justification. Vigorous efforts have been made and will continue to be made to improve the current level of voluntary recruitment to the Australian Regular Army. The level is roughly the same as it has been for some considerable time. There has been no significant movement one way or the other.

I am by no means complacent about the situation. I should like to see the number of voluntary recruits for the A.R.A. higher than it now is. I have already asked for suggestions from my own people about various measures that might well be contemplated. However, I think it might be pertinent to point out that the re-engagement rate of those eligible for re-engagement in the Australian Regular Army is very high - over 70 per cent. This is, I think, one of the highest re-engagement rates of any Army in the Western world and indicates that those people who are in the Army believe that conditions of service are good, that conditions of living are good and that there is a fine and worthwhile career in the Army. It may well be that some additional measures will have to be devised to get this message across to a broader spectrum of the general public in an effort to increase the number of volunteers for the Regular Army.

page 115

QUESTION

TELEVISION STATIONS

Mr HALLETT:
CANNING, WESTERN AUSTRALIA

– Can the PostmasterGeneral indicate when the television station situated at Mawson in Western Australia will be officially opened?

Mr HULME:
Postmaster-General · PETRIE, QUEENSLAND · LP

– The Australian Broadcasting Commission station, which will serve the central agricultural area with a transmitter at Mawson, some 35 miles from Northam, will be opened on 28th March of this year.

page 115

QUESTION

RURAL FINANCE

Mr HARDING:
HERBERT, QUEENSLAND

– I ask the Treasurer a question. He mentioned earlier this week that, together with the Prime Minister, he would be having discussions with the trading banks on rural finance. Would he include in those discussions the fact that North Queensland cane farmers claim discrimination by the trading banks in refusing them the carry on finance which is necessary if they are to exist until crushing operations begin in May?

Mr McMAHON:
LP

– Allegations have been made of discrimination by the trading banks against various interests, particularly the farming interests. On occasions when these allegations have been investigated they have seldom proved to be true. If the honorable member can give me explicit illustrations, I will have them examined by the Reserve Bank and I will let him know the result. Naturally, we are worried about the position regarding carry on finance. I think that soon I should publish a statement, or the Prime Minister should publish one, showing the extent to which the Commonwealth Government has agreed to underwrite State budgets in order to permit carry on re-stocking finance to be made available. I will obtain details of the carry on finance available from the trading banks. Nonetheless, I am glad the honorable member asked the question because I will now put in hand an inquiry to find out whether there is evidence of discrimination. If there is discrimination, we will take whatever action is practicable to see that it is overcome.

page 115

QUESTION

COMPANY TAXATION

Mr GIBSON:
DENISON, TASMANIA

– Is the Treasurer prepared to consider amending section 73a of the Income Tax Assessment Act by extending the taxation exemption already afforded so as to allow 100 per cent, of the salaries of staff directly engaged in approved research projects to be deductible from the employing company’s taxation liability?

Mr McMAHON:
LP

– It will be remembered that in the statement he made this week the Prime Minister said that the Government had been urged by industry representatives to consider urgently the problem of finance for scientific research. This inquiry is being undertaken urgently. In regard to the exact question asked by the honorable member, under the relevant section the total amount of money that is spent on scientific research can be deducted from gross profits if this money has been spent for the purposes of the business. I think that in the circumstances mentioned by the honorable member the full amount can be deducted. Nonetheless, to ensure that there is no doubt about it, I shall ask the Commissioner of Taxation to let me have a reply and I shall inform the honorable member of the results of the inquiry.

page 115

QUESTION

ARMY

Mr McIVOR:
GELLIBRAND, VICTORIA

– I ask the Minister for the Army whether it is true that Army rejection rates show that only 20 per cent, of persons who are examined are fit for military service. Can the Minister advance tha reason for the high rate of rejection for Army service?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– I am not sure whether the honorable member is referring to volunteers for the Australian Regular Army.

Mr McIVOR:
GELLIBRAND, VICTORIA · ALP

– I am referring to volunteers and conscripts.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– A question about the rejection rate amongst those who volunteer for the Regular Army has been asked previously in this House. It was answered at the time extremely well, I thought, by my predecessor. Certain standards have been laid down and must be met before a person can suitably fill a position in the Regular Army. These standards are the same for all people who enter the Army, whether they are national servicemen or volunteers for the Regular Army. The standards are based on the experience of the early days of the last war and I understand were established in the relatively early 1 940’s as a result of that wartime experience. It had been found that if those standards were lowered beyond the level that was then established, people so entering the armed forces would be an administrative liability and a danger to their colleagues. That is something that could not be tolerated in any circumstances.

page 116

QUESTION

RAIL STANDARDISATION

Mr WHITTORN:
BALACLAVA, VICTORIA

– My question is addressed to the Minister for Shipping and Transport. In view of the uncertainty that still exists about standardisation of the rail gauge between Broken Hill in New South Wales and Cockburn in South Australia, will the Minister state whether the Silverton Tramway Co. will play any part in this project? Does the Minister know that this uncertainty and lack of decision have placed an unfair burden on this public company to its disadvantage and to the disadvantage of the shareholders?

Mr FREETH:
Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP

– I regret that I cannot tell the honorable member with any certainty the precise part that the Silverton Tramway Co. will play in the future in regard to the Broken Hill to Cockburn section of the standard gauge project. We have had several discussions with the representatives of the company and they have been kept informed of the progress that ls being made in the negotiations between the Governments of New South Wales and South Australia and the Commonwealth and of the difficulties that are being experienced in sorting out a complicated position. As to the last part of the question, I understand that the Silverton Tramway Co. made increased profits last year and I note that on the share market its shares are at a pretty high level.

page 116

QUESTION

LEGAL AID

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Will the Attorney-General give sympathetic consideration to the Government’s meeting or subsidising the legal costs incurred by national service trainees who seek deferment of their call up before the courts?

Mr SNEDDEN:
Attorney-General · BRUCE, VICTORIA · LP

– Certain provisions are made for the granting of legal aid to people in the community. As far as I am aware, legal aid is not available for the purpose referred to by the honorable member. However, I will look further into this matter.

page 116

QUESTION

OVERSEAS INVESTMENT IN AUSTRALIA

Mr LUCOCK:
LYNE, NEW SOUTH WALES

– I ask the Treasurer a question. One of the factors in favour of overseas investment in Australia has been the contention that overseas capital is necessary for our development. Can the Treasurer tell me which Australian industries established or taken over by overseas interests have been assisted with finance made available by the trading banks or the Commonwealth Bank, thus reducing the amount of overseas capital gained by Australia?

Mr MCMAHON:
LP

– The House will appreciate that I could not have the facts and figures in this matter readily available.

Mr Jones:

– Why not?

Mr McMAHON:

– Does the honorable member have them? I have seen numerous reports about this matter. I will have the relevant information taken out and 1 will supply the honorable member for Lyne with the facts and figures as soon as I can.

page 117

QUESTION

DECIMAL CURRENCY

Mr DEVINE:
EAST SYDNEY, NEW SOUTH WALES

– Is the Treasurer aware that in its changeover to decimal currency the New South Wales Government has increased bus fares and expects to make a profit from these services of SI, 600,000? As this action is a blatant use of the changeover to decimal currency to engage in profiteering, what action does this Government propose to take in the matter?

Mr McMAHON:
LP

– I am not aware of the matters referred to by the honorable member. I will check on the accuracy of his statements. If they are accurate I will inform him. The honorable member should remember that this is a Federal Parliament, not a local governing authority or a State Parliament. If the New South Wales Government is wrongfully making a profit, as alleged, the appropriate place to raise the matter is in the State Parliament. The State Opposition should wake up to what is going on and let the State Parliament know.

page 117

QUESTION

BOMBS ON SEA FLOOR

Mr COCKLE:
WARRINGAH, NEW SOUTH WALES

– Has the attention of the Minister for the Navy been directed to a report that five large bombs have been found on the floor of Taylor’s Bay near Sydney? Have the naval authorities investigated this matter? If so, what is the result of the investigations?

Mr CHANEY:
Minister for the Navy · PERTH, WESTERN AUSTRALIA · LP

– I saw a report in a Sydney newspaper that some divers had found bombs on the sea floor. They thought they were aerial bombs but they proved to be squid mortar bombs which had been placed on the sea floor by the Navy after being rendered inert. This was done for purposes of training underwater divers at the Navy’s school for divers. I think twelve bombs have been so placed. The Maritime Services Board of New South Wales is aware of their presence. They do not constitute a danger to personnel or to ships.

page 117

QUESTION

LIGHTING KEROSENE

Mr FULTON:
LEICHHARDT, QUEENSLAND

– I ask the Treasurer a question. When framing the Budget will he give favourable consideration to treating lighting kerosene and lubricants in the same manner as fuel under the States Grants (Petroleum Products) Act? Lighting kerosene and lubricants are used by people in the outback for the safe operation of refrigerators and home power units.

Mr McMAHON:
LP

– I will see that these two types of fuel which are used in the outback are considered during the course of the Budget discussions in the same way as other fuel. If the honorable gentleman will give me further details I will make certain that they are placed in the hands of Treasury officials immediately.

page 117

QUESTION

SALES TAX

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– My question, which is also addressed to the Treasurer, deals with sales tax. Will he smile upon my representations to the Sales Tax Branch for some commonsense relief to be given to merchants who are required to obtain an exemption certificate for every individual purchase by a school, convent or charitable body throughout the year? Will he investigate the possibility of such customers signing one annual certificate and so lift from merchants a heavy and costly administrative procedure which is difficult indeed to justify?

Mr McMAHON:
LP

– I must confess that I have found it extremely difficult to smile since I took over this portfolio. I also admit that I have found other sources of comfort and other reasons for real enjoyment. The question asked by the honorable gentleman relating to exemption certificates seems to me to be worthy of consideration because it does seem an unnecessary administrative difficulty to have to sign individual certificates on each occasion when exemption is sought.

Mr Calwell:

– That is a reflection on your predecessor.

Mr McMAHON:

– No, it is not. My predecessor was always willing to look at every representation. I will have this matter investigated, and if I find that there are not countervailing benefits, I will see what can be done during the course of the Budget discussions.

page 117

QUESTION

STAMPS

Mr JONES:

– I direct a question to the Postmaster-General. Can he inform me what has been done with all the unused stamps that were in use prior to the changeover to decimal currency? Have they been transferred to the Philatelic Branch and will they be available for sale to collectors, as is the practice in other countries?

Mr HULME:
LP

– Under the postal regulations it is not possible for the Post Office to sell stamps other than for the face value. Philatelists were informed over the last few months that they would have to make purchases of the old £.s.d. stamps prior to 12th February last. If, in fact, they have not done so, it may be that they will be denied access to these older stamps. I inform the House that it was necessary, as at 12th February, to cancel the issue of old stamps, but it was decided, nevertheless, that the public should be able to use the old £.s.d. stamps for a period of two years subsequent to 14th February last. For the following three years, that is, from the beginning of the third year to the end of the fifth year, it will be possible for members of the public who still hold stocks of these older stamps either to have them converted at equal value to decimal stamps or to have cash paid for them in multiples of 6d. on surrendering them to the Post Office. There is no other arrangement at this moment in relation to the use of stocks of £.s.d. stamps which may have been held at 12th February.

page 118

QUESTION

VIETNAM

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– My question is directed to the Minister for External Affairs. Has the Minister been informed of the protests directed from this country to the Government of South Korea against that Government’s sending 15,000 troops to support and assist our effort in South Vietnam? Will the Minister inform the South Korean Government that this kind of protest has little or no support in Australia, even though this was one of the published decisions of the Federal Executive of the Australian Labour Party supported by every member of the Opposition?

Mr HASLUCK:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– This has not been formally brought to my notice and I do not think it would be appropriate for me, as Minister for External Affairs, to communicate with the South Korean Government on this subject unless the South Korean Government expressed concern. I am quite sure that the South Korean Government, being capable of making its own very clear decisions on subjects like South Vietnam, would evaluate these matters for what they are worth, which is very little.

page 118

QUESTION

RHODESIA

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I ask the Minister for External Affairs a question. Has the right honorable gentleman noted that, following the recent visit to Rhodesia by its national director, Mr. Eric Butler, the Australian League of Rights has tried to organise a Petrol for Rhodesia Fund on the model of the fund in South Africa? Does he know what collections have so far been made and if not will he attempt to find out? Is the Government concerned that such a fund would transgress Australian policy on sanctions on Rhodesia or that its existence may lead to a false and damaging impression abroad that Australians do not support Government policy on this matter?

Mr HASLUCK:
LP

– If such a move is being made by Australian citizens, I think they would encounter very great difficulties in transferring the petrol from Australia to Rhodesia.

Mr Whitlam:

– I am referring to the money.

Mr HASLUCK:

– If they did attempt to transfer either funds or petrol for that purpose, it would become a matter of great concern to the Government. The Government supports the measures taken by the United Kingdom and believes that it has the support of the great majority of the Australian population in this. At the same time, there is a significant body of Australian people who are deeply concerned at the possible outcome of events in Rhodesia. It is natural that they should have that concern and should express it.

page 118

QUESTION

QUARANTINE

Mr IAN ALLAN:
GWYDIR, NEW SOUTH WALES

– I desire to ask the Minister for Health a question. The Minister will recall that yesterday he was asked questions by the honorable members for Mackellar and Corangamite on the subject of quarantine, especially as it affects the illegal importation of animal products which, if they are disease carrying, could have disastrous consequences for the Australian pastoral industry. The Minister gave illuminating answers to those two questions. I now ask: In view of the number of rumours that are circulating widely in the country that large quantities of agricultural seeds, which could also carry viruses that would have disastrous consequences for Australian primary industry, are being illegally introduced into this country, will the Minister take action to ensure that the maximum penalty for this offence is substantially increased?

Dr FORBES:
Minister for Health · BARKER, SOUTH AUSTRALIA · LP

– I am not aware of the rumours mentioned by the honorable gentleman. I endorse his point that plant quarantine in relation to seeds and so on is just as important as animal quarantine is. I did not mean to minimise the importance of plant quarantine by my emphasis on animal quarantine yesterday. I will be only too glad to give careful consideration to the suggestion of the honorable gentleman.

page 119

QUESTION

CITIZEN MILITARY FORCES

Mr POLLARD:
LALOR, VICTORIA

– I direct my question to the Minister for the Army. It it a fact that members of the Citizen Military Forces were asked to volunteer for service in Vietnam? ls it a fact that only 24 members of the Citizen Military Forces volunteered for such service? Is it also a fact that only 15 of these volunteers were accepted?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– It is correct that members of the Citizen Military Forces have been advised that, subject to their own suitable qualifications and the need for certain specialist training before going to Vietnam, there are places with our forces in Vietnam that they would very well be able to fill- I have not the precise numbers with me at the present time, but I will examine that matter. The honorable member may be interested to know that over 300 members of the Citizen Military Forces are on full time duty with the Australian Regular Army.

page 119

QUESTION

DECIMAL CURRENCY

Dr MACKAY:

– My question, which I direct to the Treasurer, is supplementary to the question asked by the honorable member for East Sydney about the effects of decimal currency on bus fares in New South Wales. Will the Treasurer obtain also for the House information as to whether, first, the recent adjustment of fares in New South Wales was the result of a nationwide decision by the States to co-ordinate denominations of fares; secondly, whether the New South Wales Government has guaranteed to offset any gains of revenue in one sector by concessions in others; and, thirdly, whether fares in New South Wales are still the lowest in Australia for comparable journeys?

Mr McMAHON:
LP

- Mr. Speaker, I will obtain the facts for the honorable gentleman and let him have them when I can. I endorse the honorable gentleman’s statement that the New South Wales Government has given an assurance that if there are rises in prices in some sectors due to Government action these will be offset, to the practical extent that is possible, by reductions elsewhere. I will obtain the details relating to coordination and also figures as to the comparability of New South Wales prices or tariffs with prices or tariffs in other States. I will let the honorable gentleman have that information.

page 119

QUESTION

PHARMACEUTICAL INDUSTRY

Mr UREN:
REID, NEW SOUTH WALES

– Is the Prime Minister aware that a leading Australian financial organisation has made a survey of the pharmaceutical industry? This survey discloses that 16 of the 17 top companies in this field are foreign owned and 13 of these companies are controlled by their parent companies in the United States of America? Will the Government conduct an inquiry into the industry? If the facts disclosed in the survey are correct, will the Government act to protect Australian owned companies from overseas monopolies? Will the Prime Minister consider also the expansion of the Commonwealth Serum Laboratories so that that organisation may enter into competition with foreign owned companies?

Mr HAROLD HOLT:
Prime Minister · HIGGINS, VICTORIA · LP

- Mr. Speaker, I think it is generally known that foreign interests which have brought new techniques and new capacities to Australia in the medical field do represent a substantial area of the pharmaceutical industry in this country. The Australian community has benefited from the availability to it of the products of the research and the latest developments in this field occurring in various parts of the world. These developments certainly are not confined to the United States of America. In this field are included the United Kingdom, Switzerland and other countries. The honorable gentleman refers to competition in this field from the Australian industry. There is, of course, an Australian component in the pharmaceutical industry. The industry as a whole is highly competitive, and an element which I think does have some influence, in particular directions at any rate, is the Commonwealth Serum Laboratories. The extent to which the activities of this organisation should be expanded is a matter of Government policy. I am not prepared to give any answer on the policy question now, but I shall study the details of the honorable gentleman’s question and see in what respect my present answer should be amplified.

page 120

QUESTION

BANKING

Mr ARMSTRONG:
RIVERINA, NEW SOUTH WALES

– My question is directed to the Treasurer. I refer to that part of the statement by the Prime Minister on Tuesday night in which the right honorable gentleman said -

In addition, the trading banks will, we hope, be lending from the new funds on a long term basis on reasonable terms and conditions.

Can the Treasurer give an assurance that an understanding will be established with the trading banks to ensure that these conditions are implemented?

Mr McMAHON:
LP

– As 1 pointed out to the House yesterday in answer to a question, I have already had preliminary discussions with the Governor of the Reserve Bank and I hope soon - perhaps next week - to have discussions with some of the general managers of the trading banks. I cannot anticipate the outcome of the discussions, but I can state that it is the Government’s objective to have a sum of $50 million allocated as soon as possible so that increased long term lending to rural industry can take place.

page 120

QUESTION

ALGERIA

Mr HAYDEN:
OXLEY, QUEENSLAND

– I address a question to the Prime Minister. Will his Government lodge a strong protest with the Algerian Government concerning the manner in which Ben Bella, the former Premier of that country, has been imprisoned for several months without trial, in circumstances where he is denied visitors - even members of his family and relatives - is prevented from obtaining medical attention, is refused legal representation and, in fact, is detained in a manner which is quite inhumane and a total derogation of human rights? Will his Government also protest on this matter through any international agencies which may be appropriate for this purpose?

Mr HASLUCK:
LP

– The coup in Algeria which led to the deposition of Mr. Ben Bella was, of course, an internal matter. Whatever opinions we might hold on it, it is not appropriate for us to make representations to the Government which, de facto, is in control of Algeria. I am afraid I cannot give the honorable member the satisfaction of assuring him that we will make any representations to the Algerian Government on this subject.

page 120

QUESTION

POISON SPRAYS

Mr TURNBULL:
MALLEE, VICTORIA

– My question is addressed to the Minister for Primary Industry. He may recall that on 30th September 1965 I addressed a question lo him in which I asked whether he was aware that aerial poison spraying and the casual use of deadly chemicals by official bodies and private persons continue to kill wild life and to wreck the balance of nature, to the detriment of primary industry. I asked the Minister whether he would make investigations with a view to using the full power of his Department to overcome the problem. His answer was one word - “ Yes “. 1 now ask him: Has he made the investigations and, if so, with what result?

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

– The honorable member did ask me that question and I have made investigations. He suggests that agricultural chemicals are detrimental to primary industry, but I remind him that, lo a great degree, they also assist in increasing the productivity of primary industry. What is needed is a balanced approach. This matter is of world concern, because such spraying takes place in countries other than Australia. The Australian Agricultural Council has sponsored the preparation of a manual on the application of toxic agricultural chemicals from the air. That manual has been supported by my Department and can be bought by anyone who wants it. I commend it to the honorable member and to anyone else who is interested in this subject. In addition, the State departments are actively engaged in publicity campaigns to promote the safe use of toxic chemicals in agriculture. So far as the fruit industry is concerned, the Commonwealth Government, the Commonwealth Scientific and Industrial Research Organisation and State departments are combining to get a proper schedule of aerial spraying so that we will not have the deleterious effects we have had in the past. I am sure that if the honorable member comes to me I can give him additional detailed information.

page 121

QUESTION

ALGERIA

Mr CALWELL:

– My question to the

Minister for External Affairs is supplementary to that asked of him by the honorable member of Oxley. Is the House to understand from the Minister’s reference to a de facto government that the Australian Government does not recognise the present Government of Algeria? If this is so, what government does it recognise? How many governments are there which the Australian Government does not recognise because they are alleged to be de facto governments and not governments in the full sense of the word?

Mr HASLUCK:
LP

– I used the term “ de facto “ perhaps a little loosely. What 1 wanted to convey was that the government which is actually exercising authority in Algeria is the one with which the Australian Government must have dealings. In fact, it is the only one with which we can have dealings. There has been a change of government in Algeria. We do not have diplomatic relations with that country.

Mr Whitlam:

– Does the Minister mean that we do not have representatives accredited to Algeria?

Mr HASLUCK:

– We have not. We are fellow members with Algeria in the United Nations and -

Mr Calwell:

– To what extent does the Australian Government recognise it?

Mr HASLUCK:

– We recognise the existence of Algeria as an independent State with a government which the people of Algeria apparently want.

Mr Whitlam:

– Does the Australian Government recognise the Boumedienne Government?

Mr HASLUCK:

– The Boumedienne Government is in control in Algeria and it is the only one with which we can have dealings, if we do have dealings with Algeria.

page 121

CONSTITUTION ALTERATION (ABORIGINES) BILL 1966

Bill presented by Mr. Wentworth, and read a first time.

Second Reading

Mr WENTWORTH:
Mackellar

– I move -

That the Bill be now read a second time.

This is a bill designed to put a third question to the people at the foreshadowed referendum. A short time ago there was some degree of urgency about this Bill because the referendum was to take place on 28th May 1966. Now that the referendum has been postponed there is not the same degree of urgency, particularly since our Constitution provides that a Bill for its alteration evaporates, in effect, unless it is put to a referendum within six months of being passed through this House. In those circumstances it would be inadvisable for this House to finalise the Bill before the date of the referendum is known. The consideration of this Bill is urgent but its finalisation is urgent no longer.

In common with other members of this House I welcomed the Government’s decision to put to a referendum a proposal to repeal section 127 of the Constitution which provides that Aborigines shall not be counted for certain purposes. This is good, but does it go far enough? I believe that it does not go far enough, and I have two motives in bringing before the Parliament this expanding Bill which provides that there shall be more responsibility on the Commonwealth to help the States to deal with Aborigines and to prevent racial discrimination in Australia.

Let me refer first to the Aborigines themselves. I think that everyone who has had contact with Aborigines, as I have, has a personal liking for them and a feeling that we have a responsibility to them. They are nice, good people. Most of us would also have some sense of failure in relation to the way in which we have dealt with our Aborigines in the past. This is a failure which perhaps is not peculiar to the Australian people. Other people, not only white people, have sensed it elsewhere outside Australia. However, there is an inherent difficulty in dealing with this problem. It is not just a matter of saying: “ We will regard the Aborigines as merely poor white people”. They are not. They are special people and they do need and deserve some special help. We have a special responsibility in this sphere. Hence, in a sense, some discrimination is still necessary but it must be discrimination in their favour, not discrimination against them.

The Commonwealth so far, except in the Northern Territory, has had no direct responsibility in this sphere but there is a feeling that it should assume some greater degree or direct responsibility. That feeling stems from several sources. First, the Aborigines themselves want this to happen. If we were dealing with the rights of trade unionists or companies or pastoralists or any other group in the community we would consult with that group. The Aborigines are such a group and should be the first people to whom we would turn before deciding anything relating to their future. What do they want? What are their feelings in this regard? As a result of inquiry and a very considerable degree of contact with Aborigines, I know - I think the House would agree with me on this - that they want the Commonwealth to assume a greater degree of responsibility towards them, their rights, their opportunities and their advancement.

That is the first reason for desiring some Commonwealth responsibility. I think it is a compelling reason and one to which we have not as yet given sufficient weight. We must not regard the Aborigines as having no rights. We must not regard them as merely a group in the community with no feelings, or as being not even proper people. This is the wrong way in which to regard them. We must look first and foremost to what the Aborigines want, and they want the Commonwealth to accept a greater degree of reponsibility towards them.

The second reason why I believe the Commonwealth must assume responsibility is that considerable funds will be nc:dec and these are most readily available from Commonwealth sources. From time to time in the past the States have said: “We would like to do more for our Aborigines but we do not have the funds. There are competing claims for State funds. The Commonwealth has all the cash “. In those circumstances and because this is a pressing human problem, the Commonwealth should go to the aid of the States. Indeed, apart from those reasons, it should go to the aid of the States also because the burden of assisting the Aborigines is not shared equally among the States in proportion to their total population. Western Australia and Queensland, for example, have a more than proportionate need for assistance. It is unfair that the taxpayers of Western Australia and Queensland should be asked to bear a disproportionate share of what is really a national responsibility. It is a national task; it is a national problem with international implications. For that reason also the Commonwealth should be playing a direct part.

The Aborigines, very rightly, require equal protection throughout the Commonwealth from adverse discriminatory laws. All of such laws should go. The present position is that an Aboriginal in Queensland has quite different rights before the law from those of an Aboriginal in New South Wales. At the moment I am not suggesting which is correct and which is incorrect. I am saying that it is bad that there should be a lack of uniformity and that the Aborigines throughout Australia need equal protection against adverse discrimination.

For all of these and similar reasons, the Aboriginal problem will be handled better with some Commonwealth help. This does not mean the end of the State welfare administrations. Rather does it mean their extension as more funds become available to them properly from Commonwealth sources. In the administration of Aboriginal welfare there is a great deal to be said for the principle of decentralisation. The problems at Wyndham are not the same as those in Redfern. There are differences. Whilst all Aborigines are entitled to equal protection against adverse discrimination, the special welfare measures that are needed for them may well be different in different parts of Australia.

So I hope that the administration of Aboriginal welfare will continue to be decentralised among the States. Indeed,

I believe that at this moment we should be paying some tribute to the new spirit that has come over many of the State administrations in the last few years. They are doing much better with the indadequate resources at their command. They may not be doing as much as we or they would like; but let us acknowledge - I think the Aboriginal people themselves recognise this - that a new and better spirit, which we all should gratefully acknowledge, is abroad in the State administrations. So much for the first motive for bringing in this expanded bill, namely, to help our Aboriginal people.

The second motive is the elimination of racial discrimination inside our Australian Commonwealth. This also affects the Aboriginal people because the Aboriginal problem is best treated within the proper framework of avoidance of racial discrimination in Australia. It is by far the most important part of the Australian picture; but I believe that it is a part which is best treated in relation to the proper framework of the elimination of racial discrimination. That is one part of the motive. The other part is that in the Australian Constitution there are anachronisms dating back to the old Chinese and Kanaka problems of 70 years ago, which no longer exist. It should be a matter of pride for us to remove these anachronisms from the Constitution. It is certainly a matter of avoiding danger because they are subject to misinterpretation overseas and in certain circumstances could imperil Australia’s total security considerably. That is the other leg of the problem. First and foremost, the motive is to help our Aboriginal people. Secondly, it is to put this matter in its proper framework by avoiding the expression of the principle of racial discrimination in our Australian Constitution.

Let me pass now from the motive to the drafting of the Bill before the House. As honorable members will see, there are two operative clauses. The first provides for the repeal of the present sub-section (xxvi) of section 51 of the Constitution, which in its present form gives the Commonwealth power to make laws with respect to “ the people of any race other than the Aboriginal race in any State for whom it is deemed necessary to make special laws”, and its replacement by a simple provision that the Commonwealth shall have power to make laws for “ the advancement of the Aboriginal natives of the Commonwealth of Australia “. The second operative clause provides for the addition of a new section 117a after the existing section 117. The proposed new section reads -

Neither the Commonwealth nor any State shall make or maintain any law which subjects any person who has been born or naturalised within the Commonwealth of Australia to any discrimination or disability within the Commonwealth by reason of his racial origin.

There are the two proposals. Let me refer, first, to sub-section (xxvi) of section 51. There are two possible ways of dealing with it: First, the way that I have described and, secondly, the way of simply omitting the words “ other than the Aboriginal race in any State” so that the Commonwealth would have power to pass discriminatory laws in regard to people of any racial origin, including Aborigines.

The mere omission of the words seems to me to be unsatisfactory for several reasons. First, the sub-section does not say whether the discrimination should be adverse or favourable. If one looks at it one sees some implication, at any rate, that the discrimination would be unfavorable. We do need the power for favorable discrimination; we should not have the power for unfavorable discrimination. For that reason, I believe that it would be unsatisfactory just to omit the words.

Another reason is that the omission of the words would not confer full protection against State discrimination. It would give the Commonwealth power to legislate and, as honorable members will know, under section 109 of the Constitution Commonwealth legislation overrides State legislation. But, if honorable members will turn their attention to the judgment delivered by the High Court of Australia in the case of the City of Melbourne v. the Commonwealth of Australia in 1947, they will see that the operation of section 109 may not be quite as untrammelled as some people are inclined to suppose, lt may be that the High Court, applying the principles that it laid down in that case, would find, for example, that a Commonwealth law providing that Aborigines shall be eligible for a State franchise was a law relating not to Aborigines but to the organisation of State government and, as such, beyond Commonwealth power. So, in spite of section 109, these protections would not be absolute simply because of the removal of those few words.

Thirdly, honorable members will know that there are practical and proper impediments to getting through this House legislation aimed at any specific provision of a law of a State government. Fourthly, we do not want to retain in our Constitution the power to make laws providing for adverse racial discrimination. That power would remain if we just removed those few words. Hence, I think, this sub-section, which has never yet been used, should come out and be replaced by the positive sub-section I have suggested, giving the Commonwealth responsibility for the advancement of our Aborigines.

When I speak of this, I must speak of some things which have been said previously in this House about our need to retain what are described as the plenary powers in this sub-section (xxvi). The Nauruan question, for example, was raised in relation to it. I think there was an error of law here, because the Nauruans are not a race; hence the powers of sub-section (xxvi) could not be used in regard to them. But there are plenty of alternative powers that we could use in regard to such a problem. Sub-section (xxvi) is not operative but there are other sub-sections which would be operative: sub-section (xix) - naturalisation and aliens; sub-sections (xxvii) - immigration and emigration; sub-section (xxix) - external affairs, with the treaty making powers; subsection (xxx) - relations with the islands of the Pacific. These powers exist and their operation has been determined by a series of High Court decisions. They are sufficient to cover any conceivable situation. The plenary racial powers in sub-section (xxvi) are not needed and, indeed, they are an impediment to the good name of Australia overseas.

I have permission from the former Prime Minister, Sir Robert Menzies, to quote from a letter which he wrote to me last week in regard to this when I raised this question with him. He traversed some of the ground that I traversed and I now quote an exact sentence from the letter -

I would shed no tears over the complete repeal of sub-section (xxvi). It is, I think, quite unlikely to be operated by the Commonwealth, having regard to modern circumstances.

I think this might be sufficient to dispose of that particular item.

I come to the second question, the new section 117a. I think it is advisable to write a prohibition against racial discrimination into our Constitution in something like these words, because unless we did so there would be inadequate protection for Aborigines in both the Commonwealth and the State spheres. Our international relations would be improved by the inclusion of this section, which is in accordance with resolutions of the United Nations. It would also give expression to the ideal of homogeneity in our population which was expressed by the Prime Minister (Mr. Harold Holt) only a couple of nights ago in this House.

The suggestion that I have made does not go too far and this does not raise controversial issues which might imperil the success of the referendum. It applies only to Australian electors including, of course, Aborigines, and their children and it applies only inside Australia. It leaves unimpaired other Commonwealth powers, for example, those over aliens, immigration and external affairs. It is not a prohibition which could be used to impede proper Commonwealth action. Objections have been raised that a section on rights of this character, a prohibitory section, is foreign to the spirit of our Constitution. This does not impress me overmuch, particularly when reading sections 116 and 117 which are in the Constitution already and which themselves have the same prohibitory form.

It is said by some people that the section as I have drafted it is not sufficiently watertight. If this be so, I shall be glad of any improvements in the drafting. This is always open in the Committee stage. I do not want to be dogmatic about the actual wording of the draft and I hope that if any improvements can be suggested they will be brought forth. Indeed, Profesor Cowen, the Professor of Law in Melbourne, has suggested to me one significant improvement - just one or two words to provide for the case of immigrants from the United Kingdom who are neither born in Australia nor naturalised in Australia but are “ registered “ as citizens in Australia. I think this provision might well be put in. But these are not serious matters and I am not proposing to take up the time of the House by traversing them overmuch now.

There has been great support for this Bill. First and most important, there has been support from the Aboriginal organisations themselves. This I regard as vital and, indeed, decisive. There has been support from church bodies. Three or four weeks ago the Council of Churches, meeting in Melbourne, decided to support these proposals and to ask ministers throughout Australia to work for them. I gratefully acknowledge also editorials in the “ Catholic Weekly” of Sydney and the “Catholic Advocate “ of Melbourne, giving full support to these proposals. I thank the 250 university people who have signed in support of the proposals. I include among those two vicechancellors, a dean of law and various other people, whose very weighty support will help.

Spokesmen for the Australian Labour Party in this House have given some support to these principles and the Democratic Labour Party has also indicated support. As regards the Liberal Party I gratefully acknowledge the support of the Women’s Group in New South Wales. The Liberal Youth Council in New South Wales has seen fit to give support, as well as numerous branches and conferences.

Apex and Rotary clubs, while not formally committed as bodies to support, have helped very materially. I thank those very, very numerous helpers who have distributed pamphlets and otherwise worked. I express gratitude to these people and appeal for the continuance of their support.

I think that there is now a deep tide of popular sentiment running in favour of the kind of proposal that I have brought forward in this Bill. It may be that the Bill will be taken over by the Government. I hope that it will, and perhaps be improved on. I shall be very grateful if something of that kind occurs. All I am asking is that the substance of what I am putting forward be placed before the people at the referendum when it occurs.

Will this extra question imperil the success of other questions? I think not - rather the opposite - because there is some emotion and momentum behind this question now. It may help in clarifying these other questions and getting them carried. But this is a subsidiary point. The main point is to help our Aborigines, the people to whom we owe, as I have said, a special duty and for whom we should have a special feeling.

I ask those who support these proposals both inside and outside the House to continue to work for them. It will be necessary to dispel any suspicion that we are out to transfer immense powers from the States to the Commonwealth. This, of course, is not so. We should like the Commonwealth to share a burden with the States in a matter which, in terms of their total responsibility, is a small and embarrassing matter but which, from our point of view in this Commonwealth, should be a matter of quite prime responsibility. I have had some contacts, I am glad to say, with some of the States already. These have been on a confidential basis and I do not wish to discuss them in this House but I would say that I am not without hope and prospect that all will turn out well there. But we must see that this referendum succeeds.

Let us continue our campaign. Let us do this primarily because we want to help our own Australian Aborigines, to help them in this period of transition, to bring them through to full citizenship - a goal which we will not achieve overnight but of which we should never lose sight.

Mr SPEAKER:

– Is the motion seconded?

Mr Erwin:

– I second the motion and reserve the right to speak later.

Leave granted for debate to continue.

Mr. BEAZLEY (Fremantle) (11.46]. - The honorable member for Mackellar (Mr. Wentworth) has reminded us that there are differences in State policies in relation to Aborigines. I remember that when the Select Committee on Voting Rights of Aborigines called at Woodenbong in the north of New South Wales the members of the Committee saw there a number of Aborigines who had come down from the Cherbourg native settlement in Queensland. That settlement was a place where, I would say, the material conditions of Aborigines by normal Australian standards for Aborigines were unusually good. The housing was better than at most of the other places one might visit in Australia. The standards of nutrition were good. But one had no feeling of definite purpose as to what positively was going to happen to the people for their advancement, how they were going to fend for themselves in society. They appeared to be in a kind of protective custody. At Woodenbong, on the other hand, the housing was disgraceful, employment was intermittent, conditions were not good, the morale in the community was not high.

I asked one man why he had come down from Cherbourg to Woodenbong and his answer was: “ I would rather have freedom than good conditions “. Such a statement does, I think, qualify a man for the franchise, but in addition to that it seemed to to me a tragedy that there should have been among so many a sense that they had to choose between freedom and good conditions. There was no doubt that in the formal sense of constitutional rights, the right to vote and freedom of movement about the State, Queensland had a policy very different from and much more highly restrictive that the policies of other Stales. In terms of the ultimate survival of the Aboriginal people I do not say that Queensland policy would have been behind that of the other States; I merely remark that I could not see what the Queensland authorities were doing to enable the Aboriginal people to get off the footing onto which they had been manoeuvred. The Aborigines in that State at that time had no sense of freedom of movement within the State; in that sense they were at that time without some aspects of independence and dignity.

This is a constitutional debate. A constitution is a living document to determine the actions of government in a community. I think the honorable member for Mackellar has a great heart, first for attempting to amend the Constitution at all and, secondly, for trying to amend it in respect of the Aboriginal people. The section which he proposes to eliminate from the Constitution - it contains the restriction on the power of the Commonwealth to legislate for the Aboriginal people - reads -

The Parliament of the Commonwealth shall have power to make laws for the peace, order and good government of the Commonwealth with respect to the people of any race, other than the aboriginal race in any State, for whom it is deemed necessary to make special laws.

In the 1891 draft of the Constitution this passage read quite differently, and I want to refer to the implied censure of Australia by New Zealand resulting from the original form of words. Last night in the film that was shown in this Parliament House there were references to Sir George Grey, and I am glad to see the beginnings of a revaluation of his position in history, because I think that when we study fully the history of our country, which in this respect is tied in with that of New Zealand, we are going to see in Sir George Grey the greatest figure of imperial statesmanship in our 19th century history in the senses in which imperial policies have survived the test of the modern conscience. I think it is due very largely to him that provision was made for a democratic franchise for the Senate - a remarkable achievement in 1891 when legislative councillors as a matter of course were elected according to property qualifications. He was representing New Zealand at the Constitutional Convention as the Prime Minister of New Zealand. The original draft gave the Commonwealth power to make laws with respect to -

The affairs of people of any race with respect to whom it is deemed necessary to make special laws not applicable to the general community; but so this power shall not extend to authorise legislation with respect to the Aboriginal native race in Australia and the Maori race in New Zealand.

I have no doubt that what Sir George Grey was trying to do was to throw a defensive screen around the Maori people, to defend them from the kind of Aboriginal policies that we pursued in Australia, and when New Zealand withdrew from the negotiations designed to include it in our Federation the provision was left in the draft except that the reference to Maoris was eliminated and the Aboriginal people were the only ones then referred to in the limitation of power.

One of the men who stood for this limitation was Sir John Forrest who, as an explorer, had been very dependent on Aborigines to help him locate water and so on. When he referred to this section he said -

I cannot for the life of me see why we should desire to give the Federal parliament control of any person, whetever may be his nationality or colour, who is living in a State.

I think he conceived a defensive role in relation to Aborigines, and he was not even in favour of the Commonwealth having the Authority to repatriate the Pacific Islands labourers, which was the field of power where the real interest centred in this debate at the Constitutional Convention.

Whatever the origins of this, however, the fact remains that the provision continues as a prohibition on the Commonwealth from legislating for the people of the Aboriginal race other than those in Commonwealth territories. The honorable member for Mackellar has, I think, a quite unique and vital distinction in the politics of Australia in this respect, because in his persistent work which led to the establishment of the Australian Institute of Aboriginal Studies he extracted from the Government of the Commonwealth the first gesture of a basic respect for the Aboriginal people in 50 or 60 years. I will make a reference later to earlier gestures, which unfortunately did not live on in history, by the Government of Queensland at the turn of the century and by the Government of South Australia early in the century.

Basically all Aboriginal policy is drifting. The mind of no government in Australia and no political party in Australia are really focused on the Aboriginal people. The way in which a minority people is treated is the touchstone of national character. The true test of our respect for a minority race is whether we want them to be a distinctive people making a distinctive contribution. New Zealanders are proud of Maoris; Maoris are proud to be Maoris. Whatever failures there may be in New Zealand policy, or injustices in New Zealand policy, these fundamental and essential achievements in the vital realm of the mind are there. Our policy, which we proudly claim to be one of assimilation, is an unconscious revelation to the world that we are not yet capable of New Zealand’s maturity. We are not proud of the Aborigines, although there are many reasons why we should be, and almost no policy exists in either the Commonwealth sphere or the State sphere of encouraging Aborigines to be proud of themselves.

I remember a friend of mine who taught at the Forrest River School. He was teaching Australian history to Aboriginal children and he suddenly realised that his teaching of history was totally rejected by the children.

He sat down and asked them why, and they said: “ You teach us about Australian explorers but you never refer to the Aborigines who we know guided them, showed them how to find water in desert places and helped them. “ As a result this young man, whose name is Harry Venville, conducted researches into this question and was astounded to find the extent to which the statements of the Aboriginal children about the dependence of Australian explorers on Aborigines were true. But he was cheered to find that these Aboriginal children had a pride in themselves as a people and demanded their place in Australian history. I would say that this was the greatest compliment to the effectiveness of his own teaching, if he could foster self respect, that could possibly be made.

The Australian Institute of Aboriginal Studies is the first sign of a real respect on the part of the Commonwealth Government. It is the achievement of the honorable member for Mackellar (Mr. Wentworth), but there is credit due to the acceptance of it on the part of the Government. Every State is utterly indifferent, except perhaps in museums, to Aboriginal music, Aboriginal customs, Aboriginal religion, Aboriginal languages, Aboriginal culture and Aboriginal art. Queensland and South Australia in the 1890s and early in this century respectively took some interest, and Queensland appointed a brilliant ethnologist, Walter Edmund Roth, whose work on Aborigines in the 1890s and early in the 20th century was a vital part of the history of this country and of the Aborigines. The Queensland Government did attempt to pursue a policy based on an enlightenment proceeding from a real study of the Aboriginal people. South Australia backed the Baldwin Spencer expeditions before the First World War. Apart from that - let us face it - the States have treated Aboriginal life as unworthy of notice. This is not to say that there were no policies; but all policies envisaged the Aborigines as potential black Europeans.

There was no attempt, after Roth and Baldwin Spencer, to get in to find out who the Aboriginal people were, or who they themselves thought they were. Australians policy has been directed towards the destruction of the self consciousness of the

Aboriginal people and the policy of assimilation is now a continuation of the destruction of that self consciousness. In most cases in the States the new policy is not, in my view, a policy at all. It is an attempt to avoid the charges of apartheid and discrimination and does not go beyond that in any real creative sense. We will give them drinking rights. We will give them fornicating rights, whereas it used to be - as it is in South African law - an offence for interracial fornication to take place, although we never denied inter-marriage. We will give them voting rights and they may vote every three years for Tweedledum or Tweedledee who normally are equally indifferent to their needs. All these reforms cost the Treasury virtually nothing. We have now an Arbitration Commission decision on wages. If we ask for statistics on tuberculosis or leprosy we are told that racially segregated statistics are not kept and we are proud of the fact that we do not racially segregate our statistics. We cannot see races, but we can now identify Aborigines as a distinctive group to whom for three years we can pay lower wages. We can see Aborigines when it comes to a question of wages, but we cannot see them when it comes to a question of health statistics. But we need separate statistics about the Aboriginal people if we are ever to measure the effectiveness of policies and make moral assessments of policies. I have no doubt that in this group of Aborigines in the Northern Territory over whom one blanket definition is now thrown, some individuals are worth full wages now, but we assume that they disqualify as a group. It is based on no evidence whatsoever presented by the Aboriginal people themselves. White government officials appeared before the judge and white union officials appeared before the judge; but did he go to see the skills of the Aboriginal stockmen?

Mr Snedden:

– He did go to see the skills. There were very many inspections.

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– And will they pick out the Aborigine who has skills equal to those of the white stockman and give him equal wages?

Mr Snedden:

– But there were inspections.

Mr BEAZLEY:

– I am grateful to know that, but did Aborigines testify before the judge?

Mr Snedden:

– I believe so.

Mr BEAZLEY:

– There were customs among the Aborigines, such as wife lending, which become desperately degrading out of the context of tribal law and safeguards, and yet when we make a reform like the fornicating rights we do not notice this. In Western Australia venereal disease has quadrupled in the last two or three years and it is very often among Aborigines. We do not want any charges of apartheid. We are not thinking in terms of the real welfare of the Aborigines. We are not thinking of this background of custom. And a double hit is made. They have not wages equal to those of the Europeans. They have this background of wife lending and the giving out of their daughters, and they have developed the expenditure needs of the Europeans. Inadequate income among Aborigines in contact with Europeans leads too often to prostitution and venereal disease. We have really to look intelligently at this Aboriginal community. The honorable member for Mackellar has attempted to make us look at these people - as they look at themselves - through the Australian Institute of Aboriginal Studies. We have to look at what is really happening to them in health.

The Commonwealth Government, in the 1930s, avoided collecting unemployment statistics because it did not wish to be judged by them; therefore they were not published. Now the Commonwealth and the States avoid any statistics in relation to Aborigines and treat this deliberately cultivated ignorance as a matter for pride. It is evident that most tuberculosis is among Aboriginal people. If you ask what are the statistics for leprosy and tuberculosis you are told, smugly, that no separation of statistics on racial grounds takes place. Why not? You want statistics if you want to measure the true effectiveness of your health policy. We get glimpses from reputable private investigations of an Aboriginal infant mortality seven or eight times the European rate. If the Commonwealth and the States wish to know the success or failure of their policies they should have clear statistics of leprosy, tuberculosis, infant mortality, housing, education and levels of education before them. The honorable member for Mackellar has tried to write into the Constitution a new attitude of responsibility on the part of the Commonwealth Government. I hope that whatever problems there are about this constitutional referendum the proposals are not going to be bogged down in a fight about power between the Commonwealth and States, and I think that the honorable member has done his uttermost to avoid this.

The nation is judged on this matter. I remember that at the time Dr. Evatt raised before the United Nations the question of the maltreatment by the Communist authorities of the people in certain former Baltic States, an Aborigine was chained, in Western Australia, by the State police. The policeman had gone out to arrest an Aborigine. There were no prisons in which he could put him and he chained him to a tree overnight when bringing him to trial. But there is something peculiarly horrible about handcuffing or chaining people to trees or posts, as we have noticed quite recently. Within 24 hours the account of this episode was in Molotov’s hands in the United Nations. The whole of the AfroAsian delegations in the United Nations immediately reacted. They were much more interested in what was happening to an Aboriginal in Western Australia who had been chained - which nobody denied - than they were in what was happening to thousands of people in the former Baltic independent states, which was denied by the Soviet Government at the time. In the Commonwealth Government Doctor Evatt had no power whatever over what the Western Australian police did and no authority whatever over Western Australian Aboriginal policy, but nobody in the world cares anything for our constitutional distinctions between the Commonwealth and the States. The whole nation is judged on any Aboriginal policy, anywhere in any State, and I feel that this constitutional amendment by the honorable member for Mackellar, which gives the Commonwealth the power to legislate positively for the benefit of people of Aboriginal race - I do not conceive of brushing the States aside and I think we would need to use all the States’ instrumentalities and work in con- junction with them - at least places the final responsibility on the Government of this nation; and the final responsibility is placed on the Government of this nation by the world, whether or not we have constitutional power.

If I seem to be critical of any aspect of the policy of the Government or the Minister for Territories (Mr. Barnes). I should like to say that I do not think that there is any place for superiority in this debate. This is not a normal party attack on the Government, even if I am critical of certain things that exist in the Commonwealth. From working with the Minister on two select committees, I know of his interest in the Aboriginal people, though sometimes he disagrees with me and sometimes he agrees with me. What we are trying to conduct here is a dialogue on the question of the Aboriginal people - the people on whose wellbeing we as a nation may very well be judged. The honorable member for Mackellar wants the Commonwealth to have power to discriminate for the Aborigines. “ Discrimination “, as we know, has become a dirty word because we always assume that discrimination is hostile. I use again an analogy that 1 have used before. The Commonwealth, under its defence powers, discriminates for exservicemen who have suffered special disabilities in the service of the country. We do not give everybody in Australia a repatriation pension, but under the defence powers, the Commonwealth can discriminate in favour of demobilised servicemen so as to meet their needs.

The Aborigines are people whom in the past we have not treated as they should have been treated. They are our people. But we have not acknowledged their entitlement lo any land. We have not, until very recently, bothered to study their outlook and their customs. It almost seems that whenever any action is taken about benefits for Aborigines some delay is involved. Even though the Government’s own proposals for amendment of the Constitution with respect to a provision relating to Aborigines related merely to the census, I regret that for the time being we have brushed aside that referendum proposal and decided to delay it. As I have just said, it almost seems that for some reason or other proposed improvements in the conditions of the

Aboriginal people are fated always to be delayed. We now propose not to go ahead with the referendum on which we had agreed. There is to be further delay. The Aborigines in the Northern Territory who are engaged in the pastoral industry are not to be given equality of wages until further delay has occurred. This sort of thing always seems to happen in relation to the Aboriginal people. We know that if this were to happen in relation to trade unions, business or any other section of the Australian community the kind of uproar that would immediately arise would prevent any delay in meeting what those people conceived to be their needs. Somehow or other, Aboriginal affairs always seem to be thrust aside as secondary. This is because perhaps I in my heart and many others in their own hearts, as they would agree if they were quite honest, in our basic motives feel that Aborigines are a secondary people.

Dr. Ida Mann, Professor of Medicine at the University of Western Australia, reported some years ago that 78 per cent, of Aboriginal children suffered from trachoma. 1 think that was the percentage. Magnificently, the State Government has got rid of that disease some years since. If it had been reported that 78 per cent, of the children at the Claremont School, which my children attended, suffered from trachoma, the uproar would have resounded from one end of the State to the other and the State Government either would have had to clear up the situation in a couple of weeks or it would have been out of office, because we are passionately concerned about our own children. But, if we are honest with ourselves, we must admit that we are not passionately concerned about the Aboriginal people. I believe that this Parliament is capable of being passionately concerned about them.

I consider that the referendum campaign that the honorable member for Mackellar proposes, whether it were to succeed or fail, would be of vital importance as an educational campaign in focusing in the minds of all Australians the whole position of the people of the Aboriginal race. They will not die out. This is the point that makes the issue so vital. Across the north of Australia, there has been a reversal of the population trend. We shall have many more Aborigines in the future. We must get down to some real thinking about their place in the Australian community. I believe that the constitutional changes proposed by the honorable member for Mackellar will provide a documentary basis for new action by the Commonwealth, in conjunction with the States, in the field of Aboriginal welfare. Let us be quite clear about the situation. The States now live with the battle to get money from the Commonwealth. As far as I can see, the sums allocated for the Aboriginal people are not sufficient to meet their needs. But once there is written into the Commonwealth Constitution a clear statement of the Commonwealth’s own responsibilities, this will, I believe, lead to a transformation in the finance available to meet the needs of the Aborigines. I believe that it will lead also to a vital transformation of attitude to the building up of staffs to deal with the needs of the Aboriginal people and to a transformation in their conditions.

The Australian Institute of Aboriginal Studies, which was established at the suggestion of the honorable member for Mackellar, has now given us many clues about the way in which we should deal with the Aborigines. For the first time their thought is being opened to us and we have been shown how to treat them with real respect as a distinctive people with the right to be distinctive. For that reason, the Opposition wholeheartedly supports this Bill which was presented this morning by the honorable member for Mackellar and which is designed to amend the Constitution as it relates to Aborigines.

Mr ERWIN:
Ballaarat

.- Mr. Deputy Speaker, it gave me very much pleasure indeed to second the motion of my colleague, the honorable member for Mackellar (Mr. Wentworth). I congratulate him on the great deal of work that he has put into this. I must say at the outset that we are all very pleased to see Mrs. Kathleen Walker, the Australian Aboriginal poetess, in the chamber. When we tackle the problem of the integration of these two races, we must first realise that the responsibility is on not only our shoulders but also the shoulders of the Australian Aborigines. Through the years, we have passed the buck by saying that this is not our fault, that it is the fault of our forefathers. We must realise that if we are to bring about any successful integration of Aborigines with Europeans those in the majority - the Europeans - must take the lead. We must give because we have taken. We have taken a good deal, so now it must be nearly all giving on our part. Both races have to work at the task. Today we cannot say that we have Queensland Aborigines, New South Wales Aborigines or Western Australian Aborigines. All are Australian Aborigines. Section 51 of the Constitution, if we allow it to stay as it is at the moment, will not permit us to introduce legislation providing for definite assistance at the national level towards the welfare of our Aborigines, apart from those in the Northern Territory, as we know.

I want to emphasise a point that was stressed by previous speakers. We shall not take anything away from the States. On the contrary, we shall give something. I believe that State officials to whom I have spoken realise their responsibilities and will look at the situation in this light. We realise, as has been realised in many of the other countries where similar problems have existed, that these problems must be tackled first through the channels of education. But when we think of the education of Australian Aborigines we must think not only of reading, writing and arithmetic in our primary schools. We must think of something that is even more important than our Aboriginal children attending with European children in the same schools.

We must think of a special kind of education - an education that will bring these people to appreciate our way of life so that they can have a good life beside us, living as we do and respecting the kind of things that we respect. This will mean a special kind of education. I think this is what the honorable member for Mackellar and the honorable member for Fremantle (Mr. Beazley) were referring to when they spoke of a kind of discrimination.

In the field of primary and secondary education, the States have done and are doing a wonderful job in the education of Aboriginal children. Recently in the United States of America on a federal basis there has been started what is called the Head Start Programme. This has appealed to me as the sort of thing we could well emulate in Australia. The idea of the Head Start Programme is to bring children back to school during vacation periods. What is more, each child is paid $1.50 a day as an incentive to return to school at that time. During this period they are given a special type of education they need so much. This is the sort of thing we have to look at from a federal angle.

So I say: Let us all look seriously at the amendment of sub-section (xxxvi) of section. 51 of the Constitution and let us do it now. Unless we correct it now, the eyes of the world will soon be turned on us and we will be held to criticism for our treatment of the Aborigines. To use the common vernacular term, it is better to beat the gun and act now.

Despite the collective wisdom of those who framed the Constitution, one can hardly imagine that the section under discussion would be accepted today as readily as it was almost 70 years ago. This was not the fault of those who framed the Constitution. Conditions were different then. The simple truth is that our knowledge and understanding of the problem have grown. Our ideas have altered and developed. There is now a growing awareness of the human value of these neglected people. Our national task is patiently consistently and with understanding to help these shy, diffident and deprived people whose age old culture and organisation have been destroyed or are being threatened and disturbed by the march of our own civilisation.

The Aborigines face what is for them the immensely difficult transition from the despised shanty settlements that fringe some of our towns to secure integration and equality within the hearts of our communities. The transition can be achieved only if our national Government has the required constitutional power. This Government has a strong desire to legislate on all matters that will bring about an improvement in the assistance available to our Aborigines so that in time - no one knows how long - our two peoples ultimately will be successfully integrated.

Mr BRYANT:
Wills

.- This Bill represents an effort to bring the Australian Aboriginal community into the body of the Australian Commonwealth in a fully constitutional way. That is the project before us.

I suppose the immediate project is for those of us who are convinced that this is necessary to convince our colleagues in this House and then to carry with us the rest of Australia - in the terms of the Constitution, a majority of the people in the majority of the States.

From my own experience, which is now lengthy and broad, I am convinced that the people of Australia will support wholeheartedly any referendum that flows from this Bill. I say that because in the 10 years I have been in the Parliament, I have associated myself closely with the movement of the Aboriginal people themselves and those other people who are concerned with this problem. Because of that association, I know that there is a campaign ready to be initiated immediately the Government decides that it is politically possible to proceed with this project.

So I say to honorable members that the first thing we should do is to shed any doubts about the feelings of the citizens of Australia in this matter. The last doubts lie with ourselves perhaps as to whether we can carry our own electorates with us. I think I can give a personal guarantee that a majority of the citizens of Wills will vote for this proposition. I am sure the pursuasive advocacy of the Attorney-General (Mr. Snedden) in Bruce will have the same result. The simple question is this: Are the people with us? 1 say: Yes, they are. This is not a campaign that started only yesterday. Like most of us, I came to this Parliament not very well informed on the Aborigines. The position of these people was brought to my notice only a year or two after I entered the Parliament in late 1955. With the permission of the Australian Labour Party, we of the Opposition moved a motion on the general subject of Aboriginal welfare as long ago as 1937. Only a week later my close friend and former colleague, Mr. Haylen who was then the honorable member for Parkes, tabled a petition in this House asking that the Commonwealth take action to remove sub-section (xxvi) of section 51 from the Constitution and to repeal section 127.

In the intervening time, a tremendous campaign has been associated with this project. In fact, 94 separate petitions have been presented to the House in the nine years since the campaign got under way in

  1. Actually, it is eight years since we launched the project in a national way. Churches, most political parties, people in all the Parliaments and the trade union movement of Australia are all convinced that this change is necessary. The honorable member for Mackellar (Mr. Wentworth) has given the Parliament an opportunity to agree to it and I believe it is our bounden national duty to get on with the job.

The position is this: The Aboriginal people are still denied some of the advantages and benefits of being Australians and they will be denied those advantages while this section of the Constitution remains. While anything inhibits Commonwealth action in the field of Aboriginal advancement, the Aborigines cannot receive the full benefits of Commonwealth resources. The last arrived migrant who steps ashore in Australia can receive the benefits of Commonwealth support in education. He can go to a migrant school to learn the English language. But the Commonwealth Government has no constitutional authority to establish such a system for the Aborigines of Northern Queensland or Western Australia although I do not suppose its authority to do so would be challenged.

This is simply a question of bringing the Australian community together in a partnership. I put it to honorable members that each of them should examine his own conscience, which I presume is as clear as anybody else’s in this matter; each should take a look at his own electorate and consider where he will stand when this project comes before the people. Is his electoral committee on side in this matter? Can it carry his electorate with it? If the answer is: “ Yes “, the answer of the House to this Bill will certainly be “ Aye “. This has been a long campaign for the Aboriginal people of Australia. The instructions given to Governor Phillip when he set out to establish a settlement in Australia were -

You are to endeavour by every possible means to open an intercourse with the natives, and to conciliate their affections, enjoining all our subjects to live in amity and kindness with them. And if any of our subjects shall wantonly destroy them, or give them any unnecessary interruption in the exercise of their several occupations, it is our will and pleasure that you do cause such offenders to be brought to punishment according to the degree of offence.

Then this portion of the instructions is ironical because we have not yet got round to it -

You will endeavour to procure an account of the numbers inhabiting the neighbourhood of the intended settlement. . . .

The repeal of section 127 will enable us to get on with that for the whole of Australia. The first mention of this proposal that I can find before the Parliament, although I have not delved into every document, is a recommendation by Dr. Donald Thomson in a report to the present Minister for Trade and Industry (Mr. McEwen), who was then Minister for the Interior, on the position in the Northern Territory. This is what he said -

Although I think that the objective should be finally to bring the whole of the administration of native affairs in Australia under one control, since it is obviously desirable that there should be a uniform policy of administration . . . lt was stated that, finally it will he only the Commonwealth which will have the necessary resources and which will be able to exercise total responsibility effectively for the Aboriginal people of Australia and for all people of Australia. So I invite honorable members to remember that the proposition that we change the Constitution in this way has, so far as I can tell, the wholehearted support of every organisation associated with the Aboriginal people in Australia and the support of the Aboriginal people themselves.

If the House will bear with me for a moment I will tell honorable members something of the organisation with which I am involved as the senior vice-president. I refer to the Federal Council for Advancement of Aborigines and Torres Strait Islanders. I would note here that we might have to give some consideration to the definition of the position of the Torres Strait Islanders in this regard. This organisation has affiliates throughout Australia - church bodies, country women’s associations, trade unions, Aboriginal fellowships and so on. But the most significant feature of this organisation is the part played in it by the Aboriginal people themselves. By that term I mean folk of Aboriginal ancestry, whether three quarters or half, or anyone who considers himself to be of that nature. The President of the Council is Mr. Joe

McGinness of Cairns. He is a waterside worker and is a very powerful and impressive man. The vice-presidents include Mr. Philip Roberts, about whom some honorable members may have read in Mr. Douglas Lockwood’s book, and Mr. James Morgan who has been around the House interviewing people during the last few days. We have secretaries in the Torres Strait Islands and in each of the States, and in each case these are Aboriginal people. So we speak here this afternoon with the full support of the Aboriginal people. I think this is important to understand.

I hope that before a final decision is made the Government, through the appropriate Minister, will call in the representatives of the Aboriginal people and discuss the proposition with them so that there is complete report on this matter. It is a tradition in Australia that when we are dealing with industrial legislation the trade unions are consulted and that when considering repatriation legislation the Returned Servicemen’s League and others are consulted. In this instance the only people who have to be convinced are the members of this Parliament. I am convinced that the citizens of Australia are on side, f am convinced that the electoral machinery is in existence to carry the proposition once it is put before the citizens, and I am convinced that there can be no proper approach to the Aboriginal question in Australia until the Commonwealth Government takes it up in its full and responsible way. It is quite unfair that the principal responsibility for the Aboriginal people of Australia should reside solely in Queensland and Western Australia while the Victorians and New South Welshmen, who number seven or eight million Australian people - the great majority of Australian people and taxpayers - can shed the burden by having a very small Aboriginal community. So I appeal to the House to give serious consideration to all the proposals now before it and to examine this simple political question.

Granting that the House is agreed that the Aboriginal question is one of conscience which we can clear only by Commonwealth action; that in the political field we can get the majority of people in the majority of States on side; that there are adequate resources to campaign with; that those who campaign will have the co-operation of large bodies of significant organisations; and that, therefore, the only barrier to the successful passage into the Constitution of Commonwealth responsibility for Aborigines lies in our own hearts and our own morale, I believe that this afternoon we are setting our feet upon a path which will change the whole structure and nature of the Aboriginal situation in Australia. I am pleased that on this occasion 1 speak in full support of and in full rapport with my colleague, the honorable member for Mackellar. This is a notable advance in Australian politics. I know that several other honorable members opposite wish to add their support to this motion. Therefore, in certain ways, this is an historic matter.

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

Motion (by Mr. Snedden) agreed to -

That the time for discussion of notices be extended until 12.45 p.m.

Mr ROBINSON:
Cowper

– I rise to support this proposal. I believe that there is a very great need for us to overhaul completely our national approach to the Aboriginal problem. This is a matter that deserves even more consideration than the scope of this debate permits. The Aboriginal problem in Australia was described by the honorable member for Mackellar (Mr. Wentworth) as something that was of both national and international concern. I am one who feels very strongly on the issue of the international implications of the problem. During a visit overseas last year I suppose the question most often raised with me was about Australia’s policy in respect of the Aboriginal people of the Commonwealth. I was proud to be able to say that we did not, in a practical way, discriminate, that we were doing things to advance these people and that we regarded them as citizens of the Commonwealth. But one must go further if one is to be quite serious in a matter of this kind, and to take it further one must have regard to the constitutional factors and to the ways and means of looking to the interests of the advancement of our Aboriginal people.

It has been argued that the Constitution, as it stands, does not permit Parliament to discriminate and that the proposed alteration could introduce a situation in which Parliament could discriminate. I have no doubt that the Government will take this view fully into consideration when, as must happen, this matter comes again before the Executive for consideration. The view of the honorable member for Mackellar that we cannot proceed with this motion hastily because there cannot be a determination that would run longer than six months ahead of a referendum date is a vital consideration. But let us make sure that in the long run we are able to remove any doubt in this matter. The Commonwealth would be the poorer if the eventual outcome of this matter leaves any doubt about discrimination. We cannot permit a situation that would infer discriminataion. Having said that, I want very briefly to express some views in respect of what we should be doing in Australia from the standpoint of the practical approach that is necessary. First, we are spending insufficient money in the interests of the advancement of the Aboriginal people. In my own electorate I have many instances of the need for greater expenditure. There is scope not only for housing and education but there is also vast scope for the provision of an adequate approach to the problem of social work and welfare work. There are insufficient officers and an insufficient provision for welfare officers to do a worthwhile job in lifting the standard of the lives of the Aboriginal people. I find that there is an increased Aboriginal population in my electorate. This indicates very clearly the need for more work to be done.

In New South Wales a parliamentary select committee is currently investigating the Aboriginal problem. This will be a useful move, so far as the State is concerned. However, there is no national policy so that whatever is the determination of the parliamentary committee and whatever is its recommendation, there is still a situation of doubt and difficulty not conducive to an atmosphere in which we can successfully resolve the needs of the day of the Aborigines.

One of the principal requirements is to ensure that in respect of employment and well being the Aboriginal people are properly cared for. We are not approaching this problem as we might do. I believe that a great deal more could be done to raise their status by ensuring that we discover the things that will give them gainful employment and a useful way of life. Finance and a national policy are therefore necessary.

I support the motion because I believe it is the only way in which we can bring the overall problem effectively under notice. The Government must ensure that no doubt exists as to where the Commonwealth stands and that there is no room for doubt on the score of discrimination. Let us support this proposal so that the Government will again have the responsibility of examining the problem effectively with a view to ensuring that in the long run we do something worthwhile in the interests of the Commonwealth and, in particular, of the Aboriginal people.

Mr CROSS:
Brisbane

.- It is my privilege and pleasure to speak on this matter for a few minutes. I wish to associate my remarks with those made by previous speakers on both sides of the chamber. My friend and colleague, the honorable member for Leichhardt (Mr. Fulton), will not be able to speak in this debate and has asked me to raise the question of the status of Torres Strait Islanders. I have consulted the honorable member for Mackellar (Mr. Wentworth) who has informed me that Torres Strait Islanders would be covered by the amendment that he has proposed. It is important in drafting any legislation related to the Aboriginal people to realise and recognise that Torres Strait Islanders do not regard themselves as Aborigines. This should be made quite clear.

I propose to deal very briefly with the Queensland position. In Queensland 28,436 Aborigines are covered by the administration of the Department of Native Affairs; 21,100 are exempt from the Act and there are also 5,207 Torres Strait Islanders. In recent times in Queensland, under Mr. Pizzey as Minister in charge of the Department of Native Affairs, and Mr. Killoran, the Director of Native Affairs, material advances have been made. The Queensland Government would like to do a great deal more but its financial resources do not enable it to do so. I have already pointed out that 21,100 Aborigines are exempt from the provisions of the present Act. New legislation, which will be proclaimed early this year, will enable the State to give assistance to Aborigines not covered by the present legislation. At a time when the State is already struggling with its financial resources to meet the needs of the reserves, it seems extraordinarily difficult for any State government to do the right thing by the Aborigines in the outside communities. I refer to fringe dwellers and such people for whom very little is done. There is great need to throw the financial resources of the Commonwealth behind those of the Queensland Government. A great deal has been done on the reserves, where there are quite substantial settlements. At Cape York the settlement contains 1,015 Aborigines; at Cherbourg 1,088; and at Palm Island 1,550. I could name 20 or more settlements which, if they existed within our community, would have facilities such as post offices, savings banks and the like which they do not enjoy at the present time.

It is necessary to provide for assimilation of the people in the settlements so that their standards may be raised to equal ours. If they so choose, they should be able to live in our community. If they prefer to do so, they may remain in their own settlements, which should contain the facilities available outside. At present the State does not have the resources to provide them. Some of the facilities are really Commonwealth matters which should be provided from national finance, thus removing some of the burden from the State Governments and leaving their resources free for other works. The Aboriginal community at Yarrabah contains over 800 people but is not connected by road with Cairns, which is only a comparatively few miles away. Where else in Australia is there a community of over 800 people which has no communication with outside except by small boats? Such conditions would not apply in our society, but they do apply in an Aboriginal settlement.

A special housing scheme is needed to provide in Queensland for 21,100 Aborigines living outside reserves. A low deposit housing scheme is necessary to enable these Aborigines to be settled properly in our community; not on reserves, but in the townships. Such a housing scheme can be brought about only if the Commonwealth grants assistance. I wish to affirm that we should not and would not want to take over the position entirely. I am sure that is not the intention of speakers on either side of the House. State Governments bave their land administrations and only through co-operation between the Commonwealth and the States can the problem be solved. I support the legislation proposed by the honorable member for Mackellar.

Mr CLEAVER:
Swan

.- I am sure that the quality of the debate this morning has been appreciated, and the unanimity of views on the Bill before us is most noticeable. I support previous speakers who have said that surely this proposal should be put before the people of Australia as the third point in the anticipated referendum. We are greatly indebted to the honorable member for Mackellar (Mr. Wentworth) because of the initiative he has shown and we are conscious, too, of the able support given by so many other honorable members.

Some time ago the honorable member for Mackellar printed this measure as a draft bill, with a very simple and clear explanation. I think it was done at his own cost; I doubt whether anybody assisted him. It has been widely distributed and I wish to make it known that as a result, very many people have been in touch with me as an individual member of the Federal Parliament urging their support of the proposition. The honorable member for Fremantle (Mr. Beazley) in his very thought provoking speech, gave the illustration that the measure proposes discrimination for Aborigines rather than discrimination against them. I support him. but 1 point out that it would have to be discrimination for the Aborigines sparingly and wisely used, because at no point do the educated Aborigines, or those with any sense of personal pride, want to see an attitude of condescension towards them. Many Aborigines are not looking for a hand-out. Whilst we want the power to assist them, we do not want foolishly to use a power of condescension.

I believe that fundamentally the Australian people are against discrimination. This Bill is not a move to take away power from the State Governments, but rather to authorise the Commonwealth deliberately and specifically to extend assistance to the Aboriginal people beyond the efforts of the State Governments. 1 believe that the State Governments should come in behind any move of this kind and help us because. unfortunately, there is sensitivity about a referendum. Where there is not only party unanimity in this Parliament but also agreement by the State Governments and a clear understanding of what is our intention, I believe it would help tremendously if the State Governments indicated their support and approval.

I wish in the minute or two remaining to refer to the very helpful material supplied to the honorable member for Mackellar by Mr. Peter Hanks. Mr. Hanks drew attention to the fact that when we get back to the matter of Federal initiative, the appropriation power that is now in the hands of the Commonwealth is not sufficient. He said it is not sufficient that the Government should have power to pass laws regarding grants only and that there is a need to pass laws regulating conduct; for instance, providing for compulsory education or ensuring minimum standards of employment or housing. This is the power that the measure before us would provide.

Mr DEPUTY SPEAKER:

– Order! The time allowed for precedence of general business has expired. The honorable member for Swan will have leave to continue his speech when the debate is resumed. Resumption of the debate will be made an order of the day for the next day of sitting.

Sirring suspended from 12.45 to 2.15 p.m.

page 136

AUSTRALIAN ECONOMY

Ministerial Statement

Debate resumed from 9th March (vide page 105), on the following papers presented by Sir Robert Menzies -

Economic Inquiry - Report of Committee (Volumes I, II and Index);

Economic Inquiry -Report of Committee -

Ministerial Statement, 21st September 1965.

And on the motion by Mr. Hulme -

That the House take note of the papers.

Mr HALLETT:
Canning

.- In my opinion, the Vernon Committee’s report which is now under discussion is a very useful, constructive and informative document. The members of this Committee who were brave enough to tackle such a tremendous task as this and who have been responsible for compiling so much information for our benefit have my heartiest congratulations, because I feel that they have done a service to this country. It is true that not every Australian will agree with all the findings and conclusions contained in the report. It is also true that the members of this House and indeed the Government itself do not agree with all the findings and conclusions contained in- the document. But it would be a strange world if we all did agree with everything contained in the Vernon Committee’s report.

The fact of the matter is that we now have available to us much information that we did not have previously in the comprehensive form of a report. Whether we agree or otherwise with all the matters contained in the report, we are now in a better position to examine the situation in which we now find ourselves. Although I agree that we should always look to the future in order to know as nearly as possible exactly where we are going, I submit that we must at the same time examine our past performances. The Vernon Committee has done this to some extent by examining the position as it has existed in the post war period.

The Committee has also stressed the importance of increasing both our production and our exports. Of course, we are continually striving to do these things, and the Committee makes certain recommendations relating to them. In the main, the Committee refers to economic growth and full employment. These are matters which the Government has been striving to promote. No doubt it will continue to do so in the best interests of not only Australians but also other people throughout the world.

In order to achieve this, we must at all times strive to make the best use of the natural resources, all available skilled manpower and all other resources within Australia. This is one field to which I wish to address my remarks in speaking to this report. We are living in an age in which great skill and knowhow are required in industry. Conditions have changed rapidly in the last few years. In all our industries, both primary and secondary, research and capital are playing a greater part in promoting our well being. Indeed, if we do not make the best use of the results of research throughout the world and within Australia and if we do not make available the amount of capital necessary to enable us to take advantage of the results of research and to make the best use of the skills available to us, we shall not make the progress which is required for a number of years ahead.

The development of practically every project in Australia today, regardless of where it is, requires the application of capital and knowhow if it is to be successful. As an example, I point to the rapid development that has been taking place in the establishment of new factories in Australia in an endeavour to fulfil orders obtained within Australia and to export products to various parts of the world on a comparable basis with other countries. All the evidence available to us today emphasises that if we are to achieve this level of production adequate capital must be poured into the new factories. For example, the only way that I can see to develop the iron ore and steel projects in Australia, especially those in Western Australia, is to pour adequate capital into them. If this is done - and it is being done throughout Australia today - then I am sure that we shall be able to compete with other countries and to capture overseas markets. In fact, we have already captured some overseas markets and thereby established that these industries can succeed.

What I have said applies not only to secondary industries and to mining; it applies equally to agriculture. We are living in a new age. The statement made by the Prime Minister (Mr. Harold Holt) on rural credit last Tuesday evening was a very important one. As I see the position, it represented the first step towards making long term credit available to our agricultural industries. In my view this long term credit is extremely important. The Prime Minister indicated to the House that, together with the Treasurer (Mr. McMahon), we will be having talks with the banks in the near future on how rural credit is to be distributed. The method of distribution is of the utmost importance.

A difficult set of circumstances exists in eastern Australia today due to the present severe drought. Let us not underestimate the importance of some of the remarks contained in the Vernon Committee’s report on this position. Governments can make certain amounts of money available, but that money can only alleviate the position, not solve it. The solution of the problem is one for nature itself. In the meantime, this country cannot afford to continue losing the number of livestock it has been losing over the last year or two. I have mentioned previously in the House that at this point of time we should be in a position at least to hold our breeding stock in the country. Apparently we have not been able to do so under the conditions obtaining recently. I know that to achieve this position is extremely difficult, but its achievement is not impossible if we embark upon a programme of long term planning. We must do this. When dealing with credit, the Vernon Committee has this to say at paragraph 8.93 of its report - . . we doubt whether credit institutions are fully adjusted to the needs of the new farm technology. We see less merit in or need for interest-rate concessions than for development credit, long and intermediate in term, with repayment conditions adjusted to current land-development programmes.

The final conclusion at which the Committee arrives is that a further study of this particular problem is required. I take it that in speaking of credit the Committee is referring not only to credit to agricultural industries, but also to the need to provide credit generally throughout Australia. I can see from reading the report that in delving into the matter the Committee experienced great difficulty in trying to analyse the exact position in which we find ourselves today. I would not be surprised to learn that the greatest need will be found to exist, not in the secondary industries, but in the rural industries because the whole question of rural production is most complicated today.

The Prime Minister’s statement is really a welcome one, but the important consideration today is the manner in which the credit is to be made available. We are living in a completely different age. We are past the horse and cart age. We are at the stage where the only way by which agriculture can be made successful is by making sufficient capital available for its development. If adequate capital is not made available, then the limited amount of money that has been invested in agriculture will simply be wasted. We are simply wasting the skills and ability of the men engaged in agriculture if we simply tackle the problem in a half hearted fashion and do not produce the goods we need so badly.

We have seen this happen. It has happened to some extent in Western Australia. It was stated quite recently - I take it that the statement was correct - that something like 20 million acres has been developed in Western Australia and that another 20 million acres of land is still to be developed. When we realise that $50 million is now to be expended and in the next 15 years in one State of Australia a programme to develop 20 million acres of land is to be undertaken, we appreciate how enormous the project is. At the moment, an area of one million acres is being developed each year in Western Australia, but not sufficient money is being poured into the area each year to obtain from the project the income and exportable surplus that such an undertaking should return. To achieve the return that is possible from this project, in the next 15 or 20 years, the amount of capital that will be required will be tremendous. Nevertheless the fact that $50 million is now to be made available is some indication of the development planned at this point of time. Of course, other moneys are being invested in these fields throughout the whole of Australia, but we have still to survive the present drought. The important point is that greater quantities of money must be made available if we are to achieve the returns we require. I agree with the recommendation contained in the Vernon report concerning further economic studies. In recent years the United Kingdom, United States of America, Canada and New Zealand have found it necessary to gain further information on economic matters by additional study. This is such an important matter that we cannot ignore it.

Our balance of payments situation and the development of this nation have relied and will rely on our primary industries. If the drought position in eastern Australia continues, our situation will deteriorate. We have to improve the situation. How we do it depends on how we utilise our skills and the credit available to us. Agriculture nowadays depends on engineering and research. Figures contained in the Vernon report indicate that the percentage of money spent on our agricultural research in relation to the overall economic situation is as good as, if not better than, that spent in America and most other countries. The same cannot be said of our secondary industries. Having acquired the skills and the factories to produce the necessary machinery within Australia we must move into the credit field.

Money must be made available to develop the country and to enable farmers to use the facilities available to them. If we do not do this we are not doing the work we should be doing.

During the Budget debate last year I suggested that the banking world was not in line with modern agricultural techniques. I find that this situation applies in all the agricultural areas I have visited throughout this Commonwealth. Why should we be timid about advancing money for agriculture? Where money has been devoted to developmental projects in Western Australia success has been achieved. In some areas of Western Australia developed in recent years with war service land settlement funds about four sheep will be carried to the acre. This is the sort of thing that can be achieved, but when we look at the areas where sufficient capital has not been provided we find an entirely different picture. We cannot afford this situation. When capital is poured into a project the return benefits not only the individual, who exists for only a limited time, as do we all, but the nation as a whole. We develop a national asset through making credit available. If $50 million is made available on the terms that we understand it will be made available - finance of the kind which the Australian Country Party has been seeking ever since I have been in this House - it will relieve the situation in the eastern States and will assist farmers in the early stages of developing property.

Australia is a young country and we must develop it. This is our obligation. We have no other choice, and we have the resources to do the work. It has been frequently said - and I do not agree with this - that the world is over supplied with wheat. Never yet to my knowledge has Australia produced a bushel of wheat that it has not been able to sell. The present world situation indicates a decline in wheat production. We must carefully examine the world’s requirements and the world’s production. Wheat is an important grain for human consumption. When we look at South East Asia, Africa and other parts of the world and then study wheat production generally we realise we cannot ignore the facts. In England and in America, for instance, huge tracts of good agricultural land are being taken over for home build ing, roads and factories. I do not suggest that this should not happen, but we must realise the effect it is having on primary production. Figures relating to the use of agricultural land in Britain for purposes other than primary production are rather startling. It is obvious that this trend must continue and that production must decline. In 1965 world wheat stocks were estimated at 44.4 million metric tons, but the forecast for 1966 is 38.7 million metric tons. Australia is in a position to do something about the situation. We have vast areas not yet in production. We are in a position to make huge quantities of foodstuffs available to other parts of the world. We are in a position to supply South East Asia and other countries with wheat and other foodstuffs. This is one of the most humane things Australia can do. We can maintain our production by applying our skills and by making credit available.

The Vernon report will be worth while if nothing more comes from it than a study of the credit situation as it relates to Australian industries. We cry out about too much foreign capital coming to this country. Let us use some of our own capital in our primary producing areas to enable us to achieve greater exports, then the earnings coming back to Australia will be our own money and not foreign capital. We have the ability, skills, raw materials, good land and research facilities to accomplish this. Much of our land is starved of credit. It is in the Government’s hands to remedy the situation and I hope that when the Prime Minister (Mr. Harold Holt) and the Treasurer (Mr. McMahon) confer with the banks and credit is made available it will be the first and not the final step in this field. I believe the availability of credit will enable us to progress and to get on with the job in hand.

Mr BRIDGES-MAXWELL:
Robertson

– In speaking on this report of the Vernon Committee I should like initially to pay credit to and highly commend the Committee for the tremendous amount of work it has done in preparing this report. The report contains information that will be of great value to all sections of the Australian community for many years to come. It represents a compilation of statistics and facts which will be invaluable in determining a whole range of growth in this country. I do not intend to deal with the larger questions of economic growth and the economy in general, as these were covered by the Treasurer (Mr. McMahon) last night and by other speakers. I intend to speak about chapter 16 of the report, which deals with research. It is only a small chapter when compared with the others, but it is of tremendous importance as related to the development of this country. 1 believe that research and the development of new ideas, techniques and methods of production will have a tremendous effect on our future as a nation. I do not say that they are the complete answer. As my friend the honorable member for Canning (Mr. Hallett) has said, we must take into account other matters such as the use of credit. If we want to compete as a trading nation, if we intend to develop this continent and populate it, and if we want to maintain our standards of living, to improve our national welfare and also to be able to defend ourselves as a nation, then in the long term the attainment of those objectives will depend upon our ability to innovate, to use our resources and to develop new techniques by research and the application of science.

In chapter 16 of the report the Committee analysed Australia’s research effort and compared it with that of other countries. The Committee made various suggestions. For example, it suggested that our industrial research and development are weak. I would agree with that suggestion. I am on record as having said that in the past. I am very pleased that the Prime Minister (Mr. Harold Holt), in his state of the nation address two days ago, said that the Government is considering methods of giving an incentive to industry to enlarge its research and development effort. Later in this speech I intend to deal in greater detail with that subject. The Committee also suggested that in terms of agricultural expenditure the extension of new ideas to farmers is weak. I am delighted that in the recent recess the Minister for Primary Industry (Mr. Adermann) announced to the Australian Agricultural Council that the Government intends to increase fourfold over the next few years grants by the Commonwealth in the extension field. This will have a great effect upon the extension adtivities of the various States, particularly as the States have given an undertaking that they will not lower their present allocations in this field.

The Vernon Committee suggested also that there needs to be an increase in the basic research that is done by our universities and it suggested the setting up of a national science foundation for this purpose. If we adopt the definition that the Committee gave in its report, last year the Government had already set up the Australian Research Grants Committee, otherwise known as the Robertson Committee, to do this very thing. So some of the steps suggested had already been taken. I do not say that the Vernon Committee was original in advancing these ideas. A lot of people in industry, the universities, the Academy of Science and elsewhere have been submitting to the Government suggestions on these lines. Nevertheless, the Committee has made a good analysis of the research effort in this country and has made some good suggestions. My criticism of this section of the report is that I do not think it goes deeply enough into the subject, particularly in the light of my thoughts about the importance of research to the future development of Australia. I regret that the tables used by the Committee are out of date and that statistics, particularly for Australia, were not available. Over the years several of us have referred to this as being a field in which we need greater information.

The comparisons made in table J 6.1 of the report have been given too much emphasis, particularly in subsequent paragraphs. The Committee realised the ineffectiveness of comparing research efforts in various countries as related to the gross national product. It pointed that out itself. Indeed, the Committee devoted a fair amount of space to this point. In this context I refer to the John Joseph Fisher Lecture in Commerce in 1962, delivered by Bruce Williams at the University of Adelaide. Mr. Williams said -

It is usually taken for granted that not keeping up with Britain and America is a sign of “ backwardness “, and that backwardness is bad. If we have a low position in the research league surely we should do something to get to the top! When a problem is posed in competitive terms it is not surprising that Australians should react in this way. It is however a mistake to treat research as a competitive game. It is misleading to judge performance from our position in the “ research league “ unless we restrict our play to a league for small economies such as Sweden and Switzerland. Some

Australians, used to their highly satisfying role of David in the tennis league, may take unkindly to this suggestion, in which case I suggest that the league table approach should be dropped altogether. Research and tennis are different. The relation of research to growth is in fact a very complex one, particularly where, as in Australia, foreign companies dominate certain industries.

I should like to enlarge on this matter, because honorable members opposite have spent many hours denigrating the Government’s research effort. Indeed, the honorable member for Yarra (Dr. J. F. Cairns), in an earlier debate, referred to this particular aspect of the Vernon Committee’s report. 1 have dealt, on another occasion, with his transposition of the columns of table 16.1, and the errors that he made then. He said then, and he has continued to say, that the 0.6 per cent, that is referred to in the table in question is indicative of the low research effort in this country. I cannot agree with that statement, because I cannot accept this comparison of research and development expenditures as proportions of gross national product. I remind honorable members of what Mr. Williams said in his lecture - that we cannot compete on the basis of a research league. The United Kingdom and the United States of America have high industrial development. We, on the other hand, are a developing country. We are dependent basically upon agricultural products, we are opening up new areas, and we are developing new resources such as minerals.

As a percentage, the defence vote in the other countries is far larger than ours. If we remove from the figures that are shown in table 16.1 the defence research effort of the United States and the United Kingdom, we find that the United Kingdom, instead of expending 2.4 per cent, of its gross national product on research, is expending only 1.4 per cent. Similarly, the United States figure would come back to 1.3 per cent, and ours would come back to .45 per cent. That narrows the gap. We must also take into account the fact that our industries and our companies are smaller and are less able to afford laboratories. They must purchase their knowledge. I have agreed in the past with their doing this, but I do think the time is coming when we must try to alter this policy. If we added the sum of £50 million which Sir Frederick White has estimated as being spent on royalties - admittedly, the United States and the United

Kingdom pay a lot for royalties - an additional i per cent of our gross national product would have to be included. If we then added, because of the very real problems that we face in development, the cost of oil surveys, which are a form of research, the cost of mineral surveys and, the cost of land resources surveys, we would find that our research effort is comparable with that of many larger and better developed countries.

Similarly honorable members opposite delight in comparing our effort in the field of education with education in Turkey, Spain and Greece, but on checking the information on which they base their arguments you find that it is derived from figures in the Martin Committee’s report which were prepared in 1959. Such comparisons pay no regard to the standard of living in those other countries or to the literacy of their populations. The Leader of the Opposition (Mr. Calwell) used 1959 figures when he referred to education at a meeting at Broadmeadows in Victoria a few weeks ago, if he was reported correctly. Let us see what has happened in Australia in education. I will cite some figures for the largest State. In 1959 New South Wales spent £57,609,000 on education. This year the New South Wales Government has budgeted to spend £130 million on education - more than twice as much as it spent in 1959. But in the period since 1959 our gross national product has risen by only 50 per cent. To compare our effort., in education in this way with those of some other countries is, 1 submit, invalid, and, if I may say so, dishonest.

These matters raise the question of what is happening in science and research in Australia. Of course, agriculture is the field in which the greatest effort has been made. I am grateful to the honorable member for Canning for quoting that section of the Vernon Committee’s report in which the Committee says that insofar as comparisons are valid, our effort in primary industry as it relates to the national economy compares favourably with that of the United States. The Commonwealth has a proud record in the fields of research and science. I do not need to speak about the work of the Commonwealth Scientific and Industrial Research Organisation; it is well known. The Department of Supply has working for it a large body of eminent scientists who ere doing first class work. To be aware of &e qualify of their work one has to think only of the two new weapons systems developed by Australian scientists and accepted by the other western countries. The large and effective contributions to science of the Department of Health are well known. Great work is being done by the Department of National Development through the Bureau of Mineral Resources, the Australian Atomic Energy Commission, the Joint Coal Board, the Fuel Branch, the Forestry and Timber Bureau, the National Materials Handling Bureau and the Australian Water Resources Council. All of these bodies use funds for the development of new ideas and techniques. Within the Department of Primary Industry the application of funds to research is playing an important part in the development of the wool, wheat, tobacco, dairying, meat and barley industries. Finance for research into these industries comes not only from government sources but also from the industries themselves. The PostmasterGeneral’s Department also is involved in research work and the development of new communications systems. The State Governments are very active in the field of applied research, particularly in agriculture. I do not intend to deal in great detail with the work of universities, but with the great growth of universities in recent years there has been a growth in basic research work carried out in this country. The weak link in research, so far as industries are concerned, is the fact that only the large industries can afford research laboratories. However, in recent years Foundations have been developed which, together with private endowments, have enabled work to be done not only in the field of medical research but also for teaching and cultural purposes. As this work proceeds it will play a more important part in the cultural and scientific development of the community. Our record is one of which we as a country may be proud. It is not honest for honorable members opposite to say, as they have on many occasions, that the Government has no science policy and that we are lagging behind in our effort compared with other countries. We have some eminent scientists in this country. Valuable work is being done here. We number two or three Nobel Prize winners among our scientists. Unique work is going on. I have in mind the work on the heliograph and the interferometer at Narrabri. This is novel work unique not only in this country but in the world. These projects are being developed by Australian research workers and are being financed by Australian and overseas interests. The development by the C.S.I.R.O. Division of Plant Industry, and by universities, of new grasses and clovers for tropical areas will have a tremendous effect on development in those areas. The honorable member for Macarthur (Mr. Jeff Bate) tells me that the introduction of these new grasses may result in a fivefold increase in beef production in northern Queensland. I know from first hand knowledge that the technique of controlling the breeding cycle of sheep, which was developed by the Department of Animal Husbandry at Sydney University, will have a profound effect on the wool industry. AH of these developments have taken place in Australia and we may be proud of them.

As for the future, I believe that the continued growth of our universities will ensure that sufficient scientists, technicians and technologists come forward to service industry. We must take the long view and budget for research. We must see that organisations dependent on outside finance for their research programmes are not forced to curtail their activities but are able to continue them without interruption. I believe that even though the question of superannuation is receiving attention by the Government now, we must do something about developing a scheme so that no impediment is placed in the way of scientists who may wish to transfer from; say, the C.S.I.R.O. to a university or to industry. We must enable them to make these moves with ease and without losing any superannuation benefits. The present situation is having a deleterious effect not only on the universities but on other research organisations as well.

There is a great need to look at research in the minor industries, which are being neglected to a great extent in favour of the more wealthy and large industries. I have in mind industries such as the oyster industry, the citrus growing industry, the vegetable growing industry and the poultry industry. These industries are not able to raise large sums of money needed for research. They should be given support without having to form an industry scheme.

I am pleased that the Government is considering schemes to increase the research effort of our secondary industries. This should lead to lower costs because of reduced royalty payments and, as a consequence, place us in a stronger exporting position and strengthen our overall economic situation.

I believe that research is one of the key factors in our development. The Government has a record of which we all may be proud. Australia has been well served by the support which this Government has given to research and to science. We have been well served by our scientists.

Mr Peters:

– What did the Vernon Committee say about those things?

Mr BRIDGES-MAXWELL:

– If the honorable member for Scullin had been in the chamber earlier he would have heard me deal with suggestions by the Vernon Committee that have already been dealt with by the Government. If the honorable member reads chapter 16 of the report he will see that this matter has been dealt with. It is not honest for honorable members opposite to denigrate our scientists and our science effort.

Mr DRURY:
Ryan

.- The 15th October 1 965 issue of “ Canberra Comments “, which is the official organ of the Associated Chambers of Commerce of Australia, under the heading “The Vernon Report “, stated -

Never before has such a comprehensive compilation of information on the Australian economy been attempted. Although there has been considerable criticism of. the Committee’s recommendations, the report has an undoubted value in focussing public attention on some of Australia’s long term economic problems.

What I wish to speak about in particular is chapter 4 of the report which deals with the population and the work force. I want to give particular attention to the subject of immigration. But before I do, I would like to pay a tribute, as others have done, to the members of the Vernon Committee. I feel that not only the members of this House but the whole of the Australian nation is indebted to the Committee for the prodigious amount of time and effort that it has put into producing this remarkable piece of work.

The “ Current Affairs Bulletin “ issued by the University of Sydney on 6th December, under the heading “ A Critical Look “ had this to say - and I quote it because it makes special reference to immigration, which is the particular topic in which I am interested -

There is not space here to subject all the assumptions and arguments of the model to critical examination. But it may be worth looking at a few that have been singled out by the report’s critics. The committee lays much stress on the significance for economic policy of the change in the age structure of Australia’s population from the 1950’s to the 1960’s. During the 1950’s the number of young people entering the work force was abnormally low because of the dip in Australia’s birthrate during the depressed thirties; we were fortunate in being able to fill the gap through a high rate of immigration. During the 1960’s, on the contrary, the natural growth of the work force is being swollen by the products of the post-war “ baby boom “. It is for this reason that the committee would keep the rate of net immigration for the next few years at about the current level of 100,000 a year. The problem is not to find jobs - full employment of all these and more should present no problem - but to find the capital to equip a much more rapidly growing work force without a decline in productivity (or its rate of growth). “The demand for equipment . . . could well outrun the shortterm supply of resources and lead to inflation or excessive imports, despite the contribution to production of the migrants themselves.”

The “ Current Affairs Bulletin “ in the final paragraph that I wish to quote said -

Too much should not be made of the committee’s comment on the target rate of immigration. It is by no means certain that we could achieve a net intake of 100,000 if we tried, and the committee probably would not want this figure to be treated as a rigid limit in any one year. What the committee seems anxious to stress is that the economic limit of our capacity to absorb migrants is set primarily by available supplies of capital; that these are already being strained in a phase of unusually rapid natural growth of the work force, and that immigration policy must therefore be considered in conjunction with the prospects for externa] and internal balance of the economy, especially prospects for exports, for capital inflow and for domestic saving.

That, I believe, is a very useful and quick look in a broad sense at some of the main points that have been brought out in the Committee’s report. I pass, with more particularity, to chapter 4 of the report entitled “Population and Work Force”, which is to be found at page 4.1 of the report. The Committee’s recommendations with reference to migration are -

The present rate of net immigration of about 100,000 a year therefore seems a desirable objective for the time being.

The comment I want to make on this particular recommendation is that the phrase “for the time being” appears to refer to a preceeding section in which it is suggested that substantial increases in immigration targets should not be made now. It is suggested that it would be better to wait until the late 1960’s or early 1970’s, when the economy will have become more accustomed to large annual increases in the work force before raising the contribution of immigration to population growth still further.

The concluding recommendation of the Committee appears to have been reached in an attempt to reconcile two separate sets of assumptions, one of which appears to be predominantly expansionist, and the other one might describe as predominantly conservative. I would like to say something, first of all, about what we might call the expansionist view, which is set out in the report. The expansionist view of the Committee recognises the role of immigration in these terms - . . between 1947 and 1961, about SO per cent, of the population increase was provided by immigrants and their children. . . . migration can be greatly influenced by government policy . . the rate of natural increase is not so amenable to . . . government policy. The Australian immigration programme of the past 17 years is a good illustration of what can be done in this field by the vigorous pursuit of a clear policy.

In another paragraph the Committee said -

Immigration helped to fill a deficiency in the age structure, which interrupted the growth of the Australianborn work force in the post-war period . . Migrants contributed as much as 80 per cent, of the increase in the male work force between 1947 and 1961.

In manufacturing, their contribution was even greater. In- 1961, there were more post- 1947 migrants employed in manufacturing than the total increase in manufacturing employment between those two years, lt could be added that other benefits of migration mentioned in the various parts of the report - and this is not an exclusive list - include the supply of fully trained workers, the mobility of migrant workers, the enlargement of the domestic market, incentive to investment, national security and a variety of intangible benefits. Dealing with the dependence oi’ the economy on continuity of migration, the report said - . . the economy becomes geared to . . a steady immigration flow and sudden large varia tions could cause either shortages and inflationary pressures, or unemployment and excess capacity . . .

The report places special emphasis on the fact that immigration targets should be changed only gradually.

My comment on that section of the Committee’s report is that this is the policy that is being pursued by the Government. We have had a run of very successful years in relation to our immigration programme. Our targets have to be flexible, but at the same time they must be realistic. Honorable members who have made a study of our immigration programme and progress, as announced by the Minister for Immigration from time to time, will have realised that in the last two or three years we have set our targets, not spectacularly higher, but steadily higher, and the benefit that we have reaped from those higher targets has been very satisfactory. In the last year, for example, over 100,000 migrants were the net result of the year’s migration programme. The Government has very good reason to be very well satisfied.

In a section of the report dealing with the filling of the population and occupational gaps, the report, very properly, places a lot of emphasis on the proportion of skilled workers in the migrant intake. The report, for example, says -

Migrants have been drawn from age groups which have particularly strengthened the work force . . . the disproportion has been reduced in recent years, and the inflow has been much more balanced . . . The migrants have probably included a higher proportion of skilled workers than the Australian born population. They have also provided . . . skills of a kind complementary to those of the Australian born.

Dealing with the supply of migrants, the Committee was apparently satisfied, from its inquiries and investigations, that Australia need not expect any serious failure in the supply of immigrants, at least in the next 10 years or so. With that I believe most of us would agree. As one who believes that the future grows out of the past and the present, I think that the impetus of our immigration programme over the last few years is such that there cannot conceivably be anything but a regular improvement in our net settler intake over the next few years.

The view that I regard as the conservative view sets out the features of the immigration programme that the Committee regards as some of the less desirable features. I shall quote one paragraph of the report to illustrate the point. The Committee said -

Migrants are not only consumers and producers; they are all users of capital. They require houses, and they give rise to additional expenditure by governments on . . . public services and facilities. In addition, the workers among them need to be provided with factory space, tools, machines, etc.

My comment is that the capital expenditure incurred to meet these needs is itself a stimulus to employment and helps to absorb migrant labour. Moreover, it has been readily argued that migrants generally do not compete with Australian born workers for existing jobs but gravitate towards or are attracted by new industries, development works and new mining ventures. I would like to make a fleeting reference to many passages, but, as time is moving against me, 1 must curtail my remarks. When dealing with the argument that migration intensifies economic fluctuations, the Committee said -

During recessions, immigration may further increase unemployment; in a boom migrants’ consumer spending and their indirect demand for capital equipment may worsen shortages, drive up prices or aggravate balance of payments problems.

The answer to this assertion is provided by the Committee in its report in another place. It said -

However, these are short-term problems, and Australia’s experience . . . leads to the conclusion that long-term immigration plans need not be changed drastically because of short-term difficulties.

There follow some very interesting paragraphs relating to the immigration target recommended by the Committee. After lengthy consideration of economic pros and cons, the Committee gave credit to the demographic merits of immigration in these words -

We judge that at past rates of population increase the benefits of immigration have in total far outweighed the cost, especially in view of the complementary role played by immigration in shaping the age-structure of Australia’s work force.

Dealing then with rises in living standards and population increase, the Committee made some very interesting projections under three main headings. Having decided that future migration pro grammes should not be determined by economic considerations alone, the Committee went into the question of whether the appropriate yardstick is to be provided by the future size of, first, the total population or, secondly, the population of standard working age - that is, 15 to 64 years - or, thirdly, the work force. I will not attempt to analyse this because time will not permit me to do so, but the Committee made a very interesting projection of figures up to the year 1975 for each of these three headings.

The Committee said that within the limits set by the working age population, size and composition of the future work force will largely be determined by four main factors. They are, first, an extended period of education; secondly, additional supplies of female labour; thirdly, the trend towards tertiary industries; and, fourthly, the trend towards skills in secondary industries. If I may be permitted just a few comments on these four factors, I would say that immigration plays a complementary role or has a compensating tendency in relation to each of these four factors, first, by providing young workers to replace those at school; secondly, by having a smaller proportion of females; thirdly, because in general, migrants do not enter tertiary industries until they have been in Australia for at least some years; and, fourthly, because skilled persons represent a higher percentage of the immigration increment to the work force than in the increment contributed by native born Australians. The essence of the conclusion of chapter 4 of the report was this -

However, we do not suggest that the rate be reduced, though this might appear to be an easy solution. The risk seems worth taking. Conditions for emigration in many supplying countries are relatively favourable now and, if Australia does not take advantage of this opportunity, it may not be possible later to get the immigrants missed.

The Vernon Committee deals with the capital requirements of immigration as if immigration had begun only on 1st July 1962, which is the starting point of its projections. However, migration being a continuous process, earlier generations of migrants by now have turned from users of capital into savers and are now providers of capital. Moreover, much of our industrial plant is not fully utilised; in many instances scarcity of labour has reduced operations to one shift although two or three shifts would probably be more economical. Since the war, generally, new industries and development have depended on migrant labour rather than has the intake of migrants had to wait for the establishment of new employment opportunities. Economic growth and rising standards of living, which were factors included in the Vernon Committee’s terms of reference, by definition imply and in practice entail shortages of workers in certain industries which have to be manned by migrants. These industries include public transport, brickworks, abattoirs and postal deliveries. The prospect of heavy defence requirements in terms of service personnel and civilian workers in defence construction and engineering largely arose after the report was drafted and could not, therefore, have been taken into consideration by the Committee.

Since 1962, which is the starting point of the projections, we have already experienced three years of a growing local work force and rising migration; yet there is still some pressure on our labour resources, particularly in the skilled sector. Population increase through migration has made possible production on a larger scale and therefore at a lower cost. This has helped to replace such imports as steel, motor vehicles and earth moving equipment and has also enabled us to be more competitive in overseas markets. Not only the birth rate but births in absolute numbers have been failing in Australia since 1962 and migration will need to provide an even greater share if population growth in this country is to be maintained over the years that lie ahead.

Mr ARMSTRONG:
Riverina

– I join in the tribute that has been paid to the members of the Vernon Committee who compiled the report that we are now debating. The report is the result of the endeavours over a long period of men who are leaders in their own fields. Much of the report, of course, was out of date by the time it was finished, but this is always one of the disadvantages of a report of this complexity which requires a large volume of data for its compilation. I intend to devote most of my time to chapter 10, which deals with the availability of credit. To some extent, the report deals with planning. It is often a little difficult to determine where planning ends and control begins. I, for one, do not think control other than to a very limited and wise extent is desirable.

  1. would like to draw the attention of the House to the matter of rural finance, 1 am reluctant to say this but it is quite remarkable as one moves around Australia to find that a large number of people have no conception whatever of what happens in rural areas. That statement is rather drastic but it is completely true. The spotlight has been put on rural finance now because the rural community is in the midst of one of the most disastrous dry periods which have ever been known in the history of Australia. In fact, if this dry spell should continue, it will follow what is the driest first year of a drought on record. People in quite high offices have told me that they cannot understand why people in rural industries should be in need now of liberal credit because these people have had 16 good years in which to put aside substantial reserves. This view, of course, is based on uninformed thinking. First, we have not had 16 good years. In Queensland and New South Wales there have been what I term several intermittent dry periods. These dry periods have had serious consequences. Secondly, as far as rural finance is concerned, after the wool boom in 1950 the cost structure rose to a very high plane and has remained there. This cost structure is a serious impediment to the establishment by people in rural industry of sufficient reserves to tide them over a dry period. Several other factors are involved. There is the turn around in land. The person who owned a holding a few years ago may not have possession of the land today. People have bought into other land. Another big factor in the continuance of the solidity of the financial position of family properties in particular is the matter of probate. I have mentioned before that probate is something that has destroyed the interests of quite a number of our prominent rural families in Australia, lt is interesting to note in this respect that what have been two of the greatest names in the merino sheep industry are almost out of that industry today. Probate has been one of the biggest factors in reducing the interests of these families in the industry.
Mr Nixon:

– Shame.

Mr ARMSTRONG:

– Yes, it is an insidious thing. Our economy is still basically a primary industry economy. Nearly 80 per cent, of our industry is based on our primary products. The report of the Committee of Economic Enquiry points out in chapter 10, paragraph 96 that great changes have taken place in this regard. This paragraph does not refer to primary industry only. The Committee reports -

Changes in the monetary field have been very marked in the post-war period, and we feel that there might now be considerable merit in instituting a further study along the lines of those carried out in the other countries mentioned.

The report mentioned the United Kingdom, the United States of America, Canada and New Zealand as major examples of countries which have investigated the credit system.

A marked change has taken place in the way in which moneys have been advanced to primary industry. While this is not a criticism of trading banks, the fact remains that the proportion of moneys advanced by trading banks to primary producers altogether compared with the amount advanced by pastoral houses primarily to wool growers but also to cattlemen has shown a marked change in the last 10 years. Without going into too much detail or quoting too many statistics, I mention that in 1956 the total advances to all sections of primary industry by trading banks was £213 million. The amount of money advanced at that time by pastoral houses was £74 million. The advances rose gradually. In 1965 the amount advanced by trading banks to rural industry was £292 million while £130 million was financed by pastoral houses. It is fair to say, of course, that some of the money advanced by pastoral houses would have been obtained from trading banks. I do not mean this statement to be a criticism of the trading banks, but I suggest that if credit had been extended more liberally in a great many cases to people engaged in pastoral and agricultural pursuits, to some extent we would have been able to obviate some of the losses which have occurred in breeding flocks and breeding herds.

There is another aspect to this matter. I am a member of a Country Party drought committee which recommended, in June last, the provision of long term credits to rural industries for their re-establishment and expansion. I am certain that I speak for all members of this House, and particularly for the members of my own Party, when I say that I was delighted to hear the Prime Minister (Mr. Harold Holt) announce on Tuesday night that $50 million would be available to trading banks for distribution to primary producers. I hope that, in the very near future, the basis on which that money will be advanced to primary producers will be stated more specifically. It is obvious that if the money goes into circulation it will not be of any particular benefit to primary producers. In times of drought the primary producer is not the best person to whom to lend money. But, whichever way we look at it, the man who has the herds and the flocks today is the man who will provide the basis for putting our economy back on to the level that it was. The re-establishment of people in rural industry is a vital factor in this regard.

Queensland has had relief rains and to some extent the position has been restored. But it is not completely restored. People engaged in rural industry know that this sort of thing has been going on for some time. It is not a matter of the assets a man has. It is just that there is no credit available. I can quote instances to illustrate this point. It has been said quite fairly that if examples of this state of affairs can be given to a governmental authority the case will be taken up. This is not something that any person who owes money to a financial institution is anxious to do. It must certainly prejudice his position. I can quote the case of certain people who have a property in Queensland. A recovery in the season has occurred there. Their property is quite fairly and conservatively valued at as much as £100,000. They owe £20,000 only on it. The wool firms are not able to finance them in the purchase of breeding stock. This is not an isolated case. There are many cases of this type. I do not make a statement that I have not investigated and that I do not know is absolutely correct. This is a matter which is of vital importance if we are to recover from the effects of the drought in the shortest possible time. We are not out of the woods in New South Wales at all. Finance is required to keep the interests of people in the rural industry on an even keel.

Mention was made by the honorable member for Canning (Mr. Hallett) and the honorable member for Robertson (Mr. Bridges-Maxwell) of the advances in science in this field. It is true that half the expenditure by the Commonwealth Scientific and Industrial Research Organisation on science is in connection with primary industry. But we come to another problem in this regard, although I am happy to say that it is being overcome. I believe that we are to give some assistance to the States shortly in connection with extension services. Science has made great advances and so has technology in enabling people on the land to increase production. But none of these advances is of any value unless the producer who is the recipient of this knowledge has the finance with which to put this knowledge into effect. This has been a tremendously limiting factor.

There is another reason why people engaged in rural industry have not big reserves. In recent years, we have seen the period of the greatest expansion in our history of our sheep and cattle numbers. Since the dry times of the 1950’s, our sheep numbers have risen from 105 million to 165 million in the course of a decade. This increase has been achieved predominantly by good seasonal conditions. But it has been achieved through the benefits of science also. It is quite impossible for people - within reasonable limits at any rate - to put aside large reserves to take advantage of these great advances in science when they have also to spend large sums on their properties.

I should like to speak on overseas investment, which was referred to in the Vernon report. I am well aware of the great advantages this country has gained by bringing in capital, equipment and technological and scientific knowledge, but I think that the time has probably come when we must realise that we are no longer an adolescent country economically but an adult country. We might well, with great advantage to ourselves, form more partnerships whereby Australian capital can be given a greater opportunity for investment. It is fair to say that in a great many fields Australians are not interested in investing their money.

Mr Erwin:

– That is unfortunately true.

Mr ARMSTRONG:

– If it is true in certain fields, where the risk is great, it is proper that overseas capital should get the reward for the risk it takes and for the knowledge it brings into the country; but it is also fair to say that Australians are a little self conscious about the amount of capital they have to invest and the knowledge they have. In this connection 11 mention the steel, glass, paper and sugar industries. Those industries have been established without any assistance from overseas capital. We have obtained a lot of knowledge and benefit from organisations that have brought in money and knowhow from overseas, but we would obtain more lasting benefit in the technical and scientific world from industries which we ourselves established. There is a point of balance in this matter which is not easy to’ determine.

The Prime Minister (Mr. Harold Holt) in his statement to the House said that 90 per cent, of investment in Australia is from our own savings and 10 per cent, is from overseas capital. That, of course, is quite correct; but there are two sides to the question. If we require only 1 0 per cent, of overseas capital for some of our investment that would seem to imply that there are a lot of savings on which we could draw. One of the sources, which has been instanced of recent years, is the life assurance field. Life assurance societies are anxious to diversify their investments and have invested in mining and pastoral industries, and would. I am assured by one of the biggest societies, be prepared to expand their investments into other fields.

It would be absurd to suggest that we do not need capital, knowhow or equipment. However, we have established the industries to which I have referred and I am quite certain that we could establish others. T am extremely doubtful whether it is wise for us as a nation in the long run to allow overseas capital to come in and wholly buy out firmly based industries that process our primary production. We have established them. We have acquired the knowhow necessary to continue them and it is very doubtful, to my mind, whether it is an advantage for overseas capital to take them over. It is not so much the financial aspect that concerns me as the aspect of control. The ideas 1 am putting forward are not revolutionary because almost every country has a limitation on foreign investment. This has been done in Japan and India. The United Kingdom itself would not allow the Rootes Group to be bought out. The British Treasury insisted that there be a predominance of British money invested in it. New Zealand, Canada, Holland, France and Brazil are other examples. Brazil is a notable instance, because that country has some of the richest iron ore fields in the world. A consortium of American companies took up leases to mine iron ore in Brazil only a year or so ago and the Brazilian Government - it would not be derogatory to say that by world standards the Brazilian Government would not be considered more stable than the Australian Government - insisted that Brazilian interests should hold a 51 per cent, interest in iron ore production. That was readily acceded to. The same policy has been adopted in the Philippines, Pakistan and other countries.

So I am certain that Britain and America would be prepared to enter into partnerships with us in many fields. What has been done? Those two nations, which are our friends and allies economically and racially, make large investments in this, country. We owe a great debt of gratitude to them. We should not give the impression that we are going to take anything from them by appropriation or anything of that sort. This is a matter that could well be negotiated. This question requires a great deal of examination; it is not easy to answer.

Another matter upon which I should like to dwell momentarily is the large amount of investment by America - and some from Britain - in our pastoral lands. To me this seems to be land settlement in reverse. In my electorate there are 700,000 acres of magnificent land most of which could be subdivided. With the greatest respect to other areas in Australia some of it is the best land in this country. It is wholly owned by a company that has not one shareholder in Australia. These people look after it well, but it seems to me that we have grown away from the developing stage if it can be said about us that we do not know how to develop our pastoral and agricultural industries I do not think there is anything we do not know.

The Vernon report, in my opinion, is something to which we should give a great deal of thought. Nobody would agree with all of it. Anybody would need a lot of spare weekends to read it all. It was compiled by people of great calibre and great commercial achievement. They have put forward ideas that are well worth studying even though it may not be worth while adopting them in their entirety. As far as the economy of Australia is concerned our greatest need is to get over the effects of the drought. This country has a magnificent future; no country has a greater. We need capita], knowhow and people, but most of all we need people who have the knowhow and the capital and who are willing to come here and become Australians.

Mr DUTHIE:
Wilmot

.- After two years of intense research and analysis, after 1,500 pages and the expenditure of £149,288 the Vernon Committee’s report was finally produced in this Parliament on the night of 21st September last year by the then Prime Minister, Sir Robert Menzies. One can truthfully say that this report was rubbished by the then Prime Minister on the night that he introduced it. He rejected out of hand its main findings, its main advice and its principal suggestions. He gave the impression that the report would henceforth, as far as the Government was concerned, be buried very deep in the archives of this Parliament with the epitaph over it: “ This was the Vernon report which died unwanted and unsung.” I remarked at the time that the Prime Minister was playing the role of both gravedigger and undertaker of the Vernon report.

I wrote a poem at the time. It was entitled “Epitaph to the Vernon Report”. I put my thoughts in eight verses which I have not time to read this afternoon. Five and a half months later we are debating this document. It is an anticlimax for all of us. We all feel today, and we felt last night, that we are speaking on something that is dead and gone, and that what we are saying is a kind of epilogue. I firmly believe that as far as the Government is concerned - I am being kind in this - the report has been buried, but its analyses and findings, its suggestions and comments no doubt will be read and studied by economists, university students and other interested people outside this Parliament for many years to come. We on this side of the House believe that it deserves a much better fate than has befallen it at the hands of the Government. A sum of £149,000 is a lot of money, and it was unfair and unjust to the Committee to treat so summarily the work of two solid years.

It is interesting to note that in criticising the report so high-handedly the then Prime Minister was at the same time criticising some of his top departmental officers. For instance, on the secretariat which prepared the basic research data and calculations for the Vernon Committee there were more than 20 Commonwealth officers. The largest contingent - five officers - came from the Prime Minister’s Department. One of them had the second most senior position in the secretariat, being second only to the secretary himself, who was another very highly placed Commonwealth civil servant, with a distinguished academic background. In addition, the secretariat comprised three officers of the Commonwealth Treasury and two officers co-opted from the Reserve Bank. This is a formidable list of top line men. When the Prime Minister rubbished this report as he did that night he, in effect, rubbished those 20 men who worked so assiduously in the preparation of this most important document.

The then Prime Minister decided to set up the Committee in October 1962. Its conception was due to the aftermath of the 1961 economic recessions. The Government was jolted into doing something to offset the criticism which had been levelled at it. The Committee, therefore, was conceived as a gesture to the Government’s numerous critics. It is interesting to note that the editorial in the “ Canberra Times “ of 22nd September last year said much the same thing as I have just said. Under the heading “Sir Robert v. The Technocrats” the editorial stated -

The Vernon inquiry into the economy was born early in 1963 under an ill start and expired in the House of Representatives last night under the surgical knife of the Prime Minister.

That is exactly what happened to it. The report was finally born and emerged into broad daylight in September of last year. The Government was immediately embar rassed by it; hence the Government’s summary dismissal of its findings and advice. I suggest that this will be the last report on the economy to be sought by this Government because it started something which turned on it, and the Government does not like anything to turn on it. That is what this Government did with the stubborn truth contained in the report about the state of the economy and the ways in which to improve the economy.

It is so long since the report was before the Parliament that we need to remind ourselves of some of its contents. The report contains 1,500 pages, but it is only fair to have a quick look at some of the subjects it dealt with and some of the suggestions it contained. An interesting point is that the Committee’s conclusions were based on a growth rate in the economy of 5 per cent, a year. To maintain a growth rate of 5 per cent, a year without excessive balance of payments problems or foreign domination, the Vernon Committee made certain recommendations. In the matter of planning - which, as we all know, the Government hates - the Committee suggested that the Government should set up an advisory committee on economic growth. The then Prime Minister shied clear of that suggestion very quickly. The Committee went on to say that the proposed advisory committee should be a small body composed of a chairman, two executive members and not more than ten part time members, all selected by the Government on the basis of qualifications rather than as the representatives of interested groups.

The report stated also that although the proposed committee would be required to report on specific topics, it should be independent and able to undertake work on its own initiative. It would also operate as an important forum of consultation between the Government and the private sector. That would be a very good move and we on this side of the House would support it. The report rejected the idea of detailed target planning for individual industries but it suggested that the Government should evolve policies directed at long term rates of growth for the economy as a whole and that these should be made public.

The Committee then went on to deal with investment. It suggested that overseas investment in Australia should not go beyond £150 million a year unless there was some form of direction and control. I point out that during the last twelve months more than £250 million has come into Australia in foreign investment. This is £100 million above the limit suggested by the Vernon Committee at which some controls should be applied. The Committee went on to say that the formal approval which the Reserve Bank gives to non-sterling foreign investment should be extended to the sterling bloc to aid potential control of overseas investment. Takeovers of Australian enterprises by foreign companies should be approved by the Government - that is quite a revolutionary suggestion - and the Reserve Bank should maintain a register of all overseas investment. That is not done at present.

I believe that the Committee advanced two very good suggestions in relation to investment. It suggested that if potential overseas investment appears to be significantly beyond £150 million a year selective controls should be used. That is something else that the Government is not doing in relation to overseas investment in Australia. The Committee then went on to deal with money. It said that the Reserve Bank should acquire more control over non banking financial institutions, even if this requires further legislation. The Committee no doubt had in mind the fringe banking organisations in Australia which today are playing - uncontrolled. I point out - a major role in the economy. Hire purchase companies would be one sector to which the Committee was referring. It believed that the Commonwealth should take steps to make fiscal policy more flexible to overcome deficiencies in monetary policies. It should also set up credit facilities for long term finance of capital goods exports.

Migration is another matter to which the Committee turned its attention. It recommended a target for net immigration of 100,000 a year. The search for oil was considered and the Committee decided that oil leases are at present too large and the covenants too light. When dealing with minerals the Committee suggested that Government mapping and geological surveys should be stepped up and that rewards should be given where exploration leads to discoveries which cannot be exploited immediately. It suggested also the setting up of a special projects commission by the Federal Government, for development, to advise on new concessions and to help overcome a lack of co-ordination between State and Federal Governments. These are worthwhile, sensible and practical suggestions but everyone of them has been torpedoed by the Government.

The Committee then dealt with productivity and with primary and secondary industry. It stated that grants or loans should be given to high cost farmers to move out of the industry. Dairying is specifically mentioned in this context. Honorable members will remember that a committee which was set up a few years ago to inquire into the dairy industry found that there were 3,000 uneconomic dairy farms in Australia and suggested that these should be gradually eliminated by the present owners being bought out either by the Government or by neighbours. The Vernon Committee, as I have indicated, also referred to uneconomic dairy farms. We on this side of the House do not agree with such a drastic solution to the problem. The Committee then went on to mention costs and savings. The matters to which I have referred were considered by the Vernon Committee when it was trying to find ways and means of keeping the growth rate at 5 per cent, a year without excessive balance of payments problems arising. The report is a most intricate one and has been prepared very carefully.

I wish now to refer to comments on it by one or two men who ought to know something about it - ‘more than any of us know about it. As reported in the “ Age “ on 7th October of last year, Professor Arndt criticised the Prime Minister for his deplorable and unprecedented attack on this report.

Mr Griffiths:

– The present Prime Minister?

Mr DUTHIE:

– No, the then Prime Minister, Sir Robert Menzies. The newspaper report stated -

Professor Arndt, head of the department of economics at the Australian National University, said the Vernon report compared favorably with many similar documents produced in other countries.

It stated that Professor Arndt had spoken of the Prime Minister’s violent attack on the authors. It also stated, referring to Professor Arndt again -

He said Sir James Vernon’s committee deserved praise for three reasons: - lt had succeeded “to a remarkable extent “ in expressing complex economic matters in language which laymen, “such as politicians”, could understand;

It had also managed to incorporate in lay language much of the thinking about the Australian economy that had gone on in Australia in recent years;

The “ good sense and moderation of almost all the policy suggestions “ contained in the report. “ In fact, to some perhaps more rabid people like me the suggestions sound almost cautious,” Professor Arndt said.

The fact that many of the report’s suggestions were in accordance with the views of the Deputy Prime Minister (Mr. McEwen) made the Prime Minister’s handling of the report all the more remarkable.

We know that that is true. Members of the Country Party in this Parliament would agree with more of this report than would members of the Liberal Party. Here again we see the conflict of opinion between the two groups that make up this coalition Government.

Mr Fox:

– Has your party any conflicts of opinion?

Mr DUTHIE:

– We have a few, but they will be resolved in time. We are very patient people. In the “ Canberra Times “ of 24th September, Peter Samuel made this interesting comment -

If this report demonstrates anything, it is the need to get experts on to committees which are intended to provide expert advice. I am quite prepared to believe, though, that in this case the Government never really wanted advice in the first place, and that it simply wanted something launched so it could counter charges of complacency about the quality of its economic policymaking . . .

The terms of reference of this Committee included almost every economic policy topic under the sun except those most closely related to this short-term problem.

He also made this interesting point -

What of the Advisory Council on Economic Growth which the Prime Minister “unhesitatingly rejected”? Here Sir Robert’s argument is really feeble. He claimed that the establishment of the Council would involve handing over power to outside bodies and lavishly talked of a technocracy taking over from democracy.

Now the report deliberately made the point that the Council should be advisory and provide purely economic advice. Yet the then Prime Minister claimed that this Advisory Council would take over the government of the country. That was a stupid and ridiculous criticism of what the Committee had in mind. Sir John Crawford cleared this matter up when he answered the Prime Minister. He had the courage to do that. He said -

Far from favouring the idea of a technocratic society, the committee dismissed as undesirable the setting up of a formal planning body of the type operating in several countries.

Nor did it favour the assignment of target growth rates to sectors of industry, although it considered industry needs some lead as to the general Tate of growth thought feasible by the Government.

The committee fully realised the final responsibility of Government in a democracy and had no wish to change the established relationship between government and the authorities set up by executive action or Parliament.

The Government’s disposal of the advisory council suggestion, however, did not dispose of the need for more independent, non-government economic analysis. 1 want to comment on that. 1 believe that a government can be too close to the economic problems of the day; in other words, it can be too introspective and too cluttered up with details, so that it cannot see the wood for the trees. That is inevitable in modern democratic government, when so many factors, trends, stresses and strains are, as it were, battering on the doors of the government’s offices day after day. In my opinion there is a need for an objective approach to economic trends, strains and stresses by an independent, nongovernmental economic committee which feeds its findings to the Government regularly - monthly, if you like. In this modern age of fast moving affairs and events, we need a committee looking at the economy free from frustrating attention to the day to day tasks of administration. That is the sort of committee that the Vernon Committee had in mind - not a large one, as I mentioned at the beginning of my speech, but one equipped with men with qualifications in this field. I believe that such a committee would have a real job to do and could give the government a lot of advice - but not instructions - in relation to the strains and stresses of the economy by looking at it from a distance rather than in a close, day by day way, as a government is inclined to do.

Mr. Gates of the University of Sydney made some good comments on this report, too. He said -

The Vernon Committee was born of uneasiness at the hand-to-mouth nature of Australian economic policy. The minor disaster of 1960-61 and the subsequent slowness of recovery showed the need for intelligent anticipation and long-term guide lines . . .

The Vernon Report … is notable for four things:

Giving content to an otherwise platitudinous recitation of goals such as growth, rising living standards and economic stability;

Looking ahead and trying to assess the kind of performance that we can reasonably expect of the Australian economy;

Studying in great detail what this expectation implies for the economic variables which are subject to Government influence;

Recommending that the work of the committee should become a continuous exercise.

He also said -

Policy decisions are the responsibility of the Government, but policy formation is ultimately a matter for the widest possible public discussion.

He backed up the other men from whose statements I have quoted on the matter of the Advisory Council on Economic Growth.

We members of the Opposition say that this report has been treated shamefully. It can be a guide to a government that really wants to give permanent answers to some of the great economic problems of our time. One of the great weaknesses of this country is the limitation of the powers of the Commonwealth Parliament and Commonwealth Government under the Constitution. When we get right down to bedrock, we find that many of the fine suggestions made by the Vernon Committee cannot be fully implemented because the Commonwealth has not the power to implement them. That is a tragedy in this modern age.

Mr BOWEN:
Parramatta

.- We owe a lot to the members of the Vernon Committee. They have gathered together a great mass of statistics and factual material and placed it in order. That is what appears in the second volume of their report. They have devoted a great deal of time and thought to the major economic issues that face Australia and have recorded their views in a very convenient form. That is in the first volume of their report. Whether or not we agree with all of their conclusions, 1 think every one of us would agree that the report is of very great value. For a long time, I think, it will be a solid starting point for discussion on these major issues.

This afternoon I want to speak about their chapter on overseas investment in Australia. This is chapter 11. In it they start by setting out the arguments for and against overseas investment from our point of view. These arguments are fairly well known, but I think they will stand brief repetition.

As they see the position in sections 3 and 4 of this chapter, they place the arguments for investment from overseas in Australia as being three in number: First, that it brings new technologies and knowhow; secondly, that it supplements our domestic savings and so enables us to achieve a higher rate of capital investment and, in consequence, a higher rate of increase in productivity; and thirdly, that it relieves pressures on our balance of payments.

As against that, they put two main arguments. First, they say it builds up an increasing liability for remittance of interest and dividends overseas, and this might become an embarrassment. Secondly, it increases the proportion of overseas ownership and, consequently, overseas control over important sectors of our economy.

Having stated those arguments for and against, they pose the question: Are we relying loo heavily on overseas investment? They argue various issues and there are throughout this chapter a number of suggestions. They suggest the establishment of a register of foreign investment. 1 think most people would agree with this. It would be very useful to have it. It probably could be organised by using the foreign exchange control procedures. They are inclined to favour government regulation of takeovers. They suggest that Commonwealth and State promotion of overseas investment should be stopped. Finally, they say that possible risks in the future with our balance of payments should lead us to keep the level of new capital inflow at a level not exceeding about £150 million a year.

These may be regarded as suggestions. They make no very firm recommendations in this chapter. In fact, in the last section, section 99 of the chapter, they say, in effect, that they will not answer the question that they pose. They say -

We appreciate that in practice it would be desirable to avoid imposing inflexible limits on overseas investment, either in general or of particular kinds; nor would it be advisable for changes of policy to be too severe, lt seems to us essential, however, both for public understanding and in order to obtain the desired reaction from overseas investors, for the question to be kept in the open.

They go on with some general statements. They do not finally express a very clear or categorical answer to the question that they pose although, as I have said, they make these various suggestions in the course of their remarks.

What 1 should like to do this afternoon is to look at one or two of the issues which they raise, and to make some comments upon them. In stating the arguments in favour of a fairly free capital inflow, I think they probably do less than justice when they refer to new technologies and knowhow. One may take a particular industry, for example, the automotive industry. It is clear that the benefits which flow from this for Australia are considerable. In the first place, it provides direct employment. Also, in the contracts into which it enters with suppliers, it provides further employment. Secondly, it gives us technical skills, which otherwise we would not have had. Thirdly, it gives us an increased defence capacity beyond that which we would have had if we had not had this industry. Fourthly, of course, Australia takes a share in the profits of the industry. It takes its tax at the rate current at the time, say 8s. 6d. in the £1 or 421 per cent, of the profits. The Australian people are silent partners. If dividends are paid abroad to a double tax convention country, such as the United States or the United Kingdom, we take a further 15 per cent, in dividend withholding tax. If they are paid to a country which does not have a double tax convention with us, we take 30 per cent. Fifthly, if we did not have this industry and we wanted the cars that it produces, presumably we would have to import a very large proportion of them, and this would have a very serious effect itself on our balance of payments. Sixthly, we have an export business growing from this industry. It is exporting cars to New Zealand, South Africa and elsewhere. In fact, it is suggested that if the Japanese restrictions did not prevent us, we might be exporting cars to Japan at this time.

It is true, of course, that, against this, dividends are paid abroad from this industry and this has affected our balance of payments. Surely however, this is relatively insignificant beside the benefits which we have had. It is true that this industry is foreign owned to a large degree. The automotive industry is one of those in which the proportion of foreign ownership is very large. However, this is a matter which we can control, if it becomes dangerous to us or if we consider that it is. Indeed, we could stop the outflow of dividends immediately if we wanted to. There are risks but on the other hand great advantages. I suggest that these are worth stating because in the Committee’s report these advantages are dismissed somewhat briefly. I think we get more than this, from overseas investment. If we have controls - it has been mentioned that Japan, New Zealand, India and some other countries have controls - we run the risk that these industries will not come to us. Indeed, the automotive industry has refused to go to at least one country because of the local requirement of a 40 per cent, equity. Are we prepared to pay that sort of price for insisting upon a rigid form of control? At this stage of our development, I suggest that we are not.

Dealing with some of the arguments which were put against the inflow of capital as detriments by the Vernon Committee, perhaps the one that caused members of the Committee most worry was the increasing liability for remittances abroad. In appendix N they produced projections. One of these is reproduced as a table in the course of the chapter as one bearing importantly on this matter. In this they calculate what will be our liability for payment of dividends and interest abroad in 10 years time, if we go on importing capital at the rate of £50 million a year, £100 million a year, £150 million a year, £200 million a year, or £250 million a year. They have a look at the figures on their projection and they find that if we import £250 million a year, then in 10 years our dividend bill will be £616 million. They say, of course, after having a look at the balance of payments this figure is too large. It is largely for this reason that they come to the conclusion we should keep our inflow of capital at the rate of about £150 million a year, so as not to produce that result.

There are various criticisms of this. I would not want to develop them in detail this afternoon. They are dealt with very effectively in the supplement to the “ Treasury Information Bulletin “ entitled “ Australian Balance of Payments “, which was issued last month.

The Committee’s table involves a number of assumptions. In the first place, the figures are produced by assuming that whenever capital comes in and produces its profits, 50 per cent, of those profits will be ploughed back. It is also assumed that they will always be producing 8 per cent, profit. It is from these assumptions that the Committee arrives at its figure of £616 million. In addition, when we look at these figures we find that the Committee has assumed certain rates of imports over the period of 10 years and certain rates of exports. Already the Committee’s assumption about the probable increase in the rate of exports has proved to be an underestimate. The members of the Committee underestimated, for instance, the amount that we would receive during this period from exports of iron ore. Contracts already in existence when considered in conjunction with projected contracts, show, I suggest, that they have seriously underestimated this source of export income. It would seem that we can use in this direction a far greater capital inflow than the Committee was prepared to recommend when it used this arithmetical approach. I suggest that in rejecting that recommendation of the Committee the Government was quite right. Hindsight in this instance shows the risk of being tied too closely to equations and arithmetical calculations of economists, when deciding Government policy.

The second worry that the Committee bad about overseas capital concerned the extent to which ownership of Australian industry was falling into foreign hands. The Committee calculated that about 25 per cent, of Australian industry was owned by overseas interests. It pointed out that in the case of some industries, such as the automotive industry, the pharmaceutical industry and the petrol refining industry, the proportion was very much higher, perhaps more than 90 per cent. Some reference was made to Canada and to the fact that United States interests have a very big share in Canadian industry, but one or two matters are worth noting in this regard. In the case of Australia, in contrast with Canada, the foreign ownership of our industries is by corporations in different countries. They are not all in one country. The largest proportion of foreign ownership of Australian industry is to be found in the United Kingdom, and the second largest proportion is held by companies in the United States of America. But there are also proportions of foreign ownership of Australian industry in Canada, New Zealand and other countries. It is almost ridiculous to suggest that all these companies in various countries, or even the ones scattered within single countries, could ever combine in any hostile sense in united action against us. This seems to be the fear that has received expression. Foreign ownership has been spoken of as though it were all in one hand, and, of course, it is not.

There is a second matter that is worthy of attention. When we talk about and criticise foreign ownership we tend to speak as though there is a certain Australian industry and foreign interests are coming to take it over. This may be so in the case of takeovers, but in the great majority of industries the fact is that we would not have those industries here at all, if they were not foreign owned. Foreign capital has virtually created them in the first place. Often when we talk about the difficulties of foreign ownership, we should talk about choosing between having certain industries partially or wholly foreign owned or not having those industries at all.

Finally, let me remind the House that we are not without power to control the situation. We can watch it and, if it looks like getting out of hand we can stop repatriation of dividends or capital. Indeed, we can exercise very considerable powers of control over foreign ownership. But the situation has not yet been reached in Australia in which it has been deemed necessary to exercise these powers. We must always remember the power that flows from the Foreign Exchange Control Regulations under the Banking Act. The power is exercised at the present time so as to encourage investment and not to restrict it, but, I repeat, the power is there.

Let me now deal with the suggestion that there should be at least 40 per cent, of Australian equity in enterprises carried out in this country. Some people say that we should insist on 40 per cent. Australian equity. The Vernon Committee considered this suggestion and recommended against it. It said that we should not insist on 40 per cent. Australian equity as a means of reducing the financial control exercised over Australian industries by overseas interests because, if we did so, we would be merely placing more Australian capital under foreign control. That capital could be under Australian control, could be employed elsewhere in the Australian economy, and should not be put under foreign control as a minority interest.

In addition, of course, this overseas capital comes in very largely in connection with risk ventures, such as oil exploration and mineral ventures. We do not find Australian capital willing to come in on the required scale. Investors in those ventures might have to resign themselves to losses for five years or so and then spend a number of years recouping those losses. They might not be able to look forward to a profit for a very long time. We cannot insist on 40 per cent. Australian equity on those terms. It is not practical politics. In addition, as I have said, the imposition of this requirement would often result in our failing to establish the industries contemplated. This has happened in India and in other countries which have insisted upon such a requirement. We have not so far been prepared to pay a similar price for the privilege of 40 per cent. Australian ownership.

Nevertheless the Foreign Exchange Control Regulations have had an influence on the position. When interests outside the sterling area contemplate a takeover they tend to ask for an assurance from those administering the Regulations that they will be able to get their dividends out. While they do not obtain a contract guaranteeing that they will get their dividends out, they are given a statement of policy, provided their propositions are suitable, that they will be able to get them out. In one recent case the proposition was that the overseas interests would take over only 60 per cent. of a very large Australian industry and would leave 40 per cent, under Australian control. They made this proposition because they knew it was in accordance with the general policy of the Australian Government. In this way the Foreign Exchange Control Regulations are exercising their influence, and at the same time we avoid any undesirably rigid legislation setting out that 40 per cent. Australian industry is an absolute requirement and so producing undesirable results. We have the power to control and we are at present exercising it to provide for a free flow. We can keep an eye on the situation and we can altar our policy, if necessary, to deal with any risks arising from foreign ownership. There are risks, as the Vernon Committee pointed out, of building up too great a liability iti dividends and interest, but there are also risks on the other side.

One of the results of having this capital inflow has been to enable us to support a very large immigration programme and increase the rate of our development. We may not have unlimited time to develop this country. If we start to restrict, by control, the free inflow of capital we will reduce the pace of our development. That is the risk on the other side of the ledger. Are we prepared to take it? I suggest that at present there is only one answer to this question. We should have a free flow of capital; we should provide for registration and records so that we can exercise control if the need arises, but we should not at present impose serious restrictions.

Mr DALY:
Grayndler

.- I do not wish to concentrate on the actual provisions of this valuable report by the Vernon Committee of Economic Inquiry because I think it is important, in view of the way in which the former Prime Minister, Sir Robert Menzies, and members of his Government rubbished this excellent document when it was presented to the House, to remind honorable members of how the inquiry was instituted; the people who were appointed members of it; the general attitude of the Government to a report prepared, as the honorable member for Melbourne Ports (Mr. Crean) has said, by a committee personally selected by the Government, which had written the terms of reference; and the fact that all the inquiries were made with the full authority of the Government. Because this report was rubbished by the then Prime Minister and because reflections and aspersions were cast on the members of the Committee and certain of their findings. I think we should recall how the report was born, and also a few of the factors associated wilh “the political approach of this Government to the great problems which were covered by the document. I believe the best summary of how the report originated is contained in the “Current Affairs Bulletin” of 6th December 1965, which said -

The Vernon Report had its origin in a decision by the Menzies Government announced by the Prime Minister on October 17, 1962, to appoint a Committee of Economic Inquiry. The decision to hold such an inquiry arose from the events of 1960-61; . . .

Particularly in December 1961 when the Government was within 100 votes of defeat - the unusually severe economic recession that had followed the restrictive measures of November 1960; much public discontent with the so-called “ stop-go “ policies; the Government’s near-defeat in the December, 1961, elections; uncertainty engendered by Britain’s moves towards entry into the European Common Market, and the somewhat slow progress of economic recovery during 1962. Two more specific factors precipitated and shaped the decision. One was a vocal and surprisingly widespread public demand for some form of national economic planning on the French model, or at least on the lines of the National Economic Development Council set up by the Conservative Macmillan Government in Britain. The other was an acute controversy over tariff policy that had just culminated in the resignation of the chairman of the Tariff Board.

The Menzies Government was firmly opposed to long-term planning in any form; a once-for-all factfinding economic inquiry was as far as it was, reluctantly, prepared to go.

In other words, the foundation of this report was laid in a period of serious economic difficulty. The Government became panic stricken at the effects of its economic policies - even at this stage its policies are bringing this country to its knees - and the great public reaction to them, and felt that some gesture had to be made to the people as to its intentions in respect of this matter. The former Prime Minister, in a speech in this House on J 3 th February 1963, announced in his usual oratorical manner that an economic inquiry would be instituted. He then outlined the terms of reference to the House and since then they have been available for all to see. They were wide, and extensive and were chosen by the government of the day after many months of consideration and after the fright and panic engendered by near defeat in the election.

On this Committee were many notable citizens. I repeat their names in order that the public may know them. The Chairman was Dr. Vernon, Managing Director of the Colonial Sugar Refining Co. Ltd., which has extensive interests in aspects of primary and secondary industry - a first class Government choice, no doubt, of a man pledged to support a government like this economically and, maybe, politically. He is well known as a man of exceptional ability and judgment - so the Prime Minister said - with a fine record of public service. I agree with all these things. He is a notable man in the community, and Cabinet decided that the chairmanship should go to one who would probably be regarded as detached from any present or past formulation or execution of Government economic policy.

Then there was Sir John Crawford, known to everyone in this Parliament no doubt, and to most people in the country. The then Prime Minister said of him -

Sir John Crawford’s capacity to take a prominent part in this investigation is universally acknowledged by every section of productive industry and business generally, as well as in high academic circles.

In addition, the then Prime Minister announced the appointment to the Committee of Professor Karmel of Adelaide who, as he said, is a distinguished academic economist of high repute in his own field. Another member of the Committee was Mr. D. G. Molesworth, Chairman of F. J. Walker Ltd., a large meat packing organisation which controls abattoirs and cool stores and has interests in sheep and cattle. There were other qualities associated with him which justified his appointment. Another member was Mr. Kenneth Myer who, as the then Prime Minister said, is well known as Deputy Chairman and Managing Director of the Myer Emporium Ltd. of Melbourne. Sir Robert Menzies finished his speech by saying -

The Government is grateful to these busy and able men who have agreed to accept this additional burden, and is confident that a great purpose will be served by the inquiry on which they are embarking.

I suggest to honorable members that everyone appointed to this Committee was a reputable citizen - a citizen of integrity and capacity. Everyone would have been personally chosen by the Government not only for his ability but because of his support of the Government and the fact this his approach to problems was in line with the Government’s thinking on economic matters. I give that background in order that honorable members will know that members of the Committee, personally selected by the then Prime Minister and the Government, were hand picked and were given special terms of reference. There could be no dispute as to their ability to carry out the inquiry. They no doubt believed in the policies and approach of the government of the day. There was also the fact that their report would be of great benefit to the country and one of which notice should be taken. After the Committee had laboured for some time, the report was presented to the Parliament by the then Prime Minister on 21st September, 1965.

As I have said, the Committee was appointed because the Government was tottering on the brink of defeat in this Parliament, with a margin of only one vote. The appointment of the Committee was just a face saving proposal. The Government hoped it would be able to discard the report without comment when it was received and the Government had weathered the economic storms of that time.

Let us see what this document cost to produce. I do not know how many pages it contains, but it comprises two huge volumes which I think weigh 11 lb. This was one of the most extensive researches and inquiries ever undertaken in this country. In answer to a question I asked in this Parliament I was advised by the then Prime Minister on 10 th November 1965 that the Federal Government would have spent almost £150,000 on the Vernon report by the end of the financial year. A report in the “ Canberra Times” of 10th November 1965 said -

The Prime Minister, Sir Robert Menzies, said yesterday expenditure to June 30 this year was £113,228 and £36,000 had been appropriated in the 1965-66 Budget- a total of £149,228.

Itemised costs since 1962 are:

Salaries £74,454; Consultants’ fees £8,086, travelling expenses £23,949; office requisites £7,055; readers’ fees £2,281; printing of report £32,360; miscellaneous £1,043.

The report continued -

Sir Robert said the cost of a wide range of additional services provided by Government depart ments and non-Government bodies was met by these organisations themselves.

The biggest expenditure was incurred in 1963-64 -£56,085.

I suppose one could say, conservatively, that this document cost - with all the inclusion of the expenses borne by the departments involved - much more than £250,000 to produce. I point out these facts to the House and the people in order to show that we are dealing with a document that is valuable not only in respect of the findings it contains, but also because it was produced at huge cost to the Australian taxpayer. Therefore, the reception which this document was given by the Government of the day should be criticised at this time. The document was produced in Parliament in September 1965 and, according to the reports of that time, the Government rejected the report. If honorable members care to study “ Hansard “ they will see that the then Prime Minister was very critical of the Committee’s findings and that he differed from them on a number of fundamental issues. A newspaper report at the time stated -

The Prime Minister (Sir Robert Menzies) last night tabled the report of the Vernon Committee of Economic Inquiry in Parliament and announced that the Government had rejected the committee’s principal recommendations.

What does the Government want? It picks the Committee, fixes the terms of reference and spends about £250,000 of the Australian taxpayers’ money on the inquiry, and because the Committee’s recommendations are not right in line with its outmoded economic policy, the Government rejects them out of hand. Anybody who listened to the former Prime Minister in the Parliament on the night when he presented the report will know that he treated with scorn the findings of these notable Australian citizens and in every way approached the report as if, simply because it did not dovetail with the Government’s economic policies which are bringing down the Australian economy, it was anti-Government. As I have said, Sir Robert Menzies stated that the Government rejected the Committee’s principal recommendations. The newspaper report continues -

The committee’s inquiries had gone beyond the terms of reference set by the Government in 1963, Sir Robert said in a statement which included detailed criticism of conclusions in the 1,800 page, one million word report.

Sir Robert expressed strong reservations about the committee’s proposals for greater use of taxation as an economic regulator.

The committee, he said, had gone beyond its terms of reference in recommending a limitation of capital inflow, selective controls on foreign investment and appointment of a consultative committee to advise on administration of these controls. “ We express no opinion on these suggestions at present,” he said. “ We have been making the necessary preparations for a full Cabinet review of the problem, the practical difficulties of which we al) recognise.” 1 now come to Sir Robert’s real criticism of the report, which is stated in the newspaper in these terms -

Sir Robert said he doubted whether the nation could accomplish the “ conscious diversion of resources “ which the committee believed imperative if a 5 per cent, growth rate were to be achieved.

Describing the report as “ the result of most valuable and painstaking and conscientious examination “, the Prime Minister said: “ Some suggestions made by the committee are not acceptable to us, but this does not qualify our deep appreciation of the committee’s work.

It is a fortunate country which can enlist in its voluntary service men of such experience and distinction as those who constituted this committee,” Sir Robert said. “ The report has a magnitude both in scope and detail never approached by any former inquiry.”

Was not that a backhanded compliment to these men who had given their time and energy, which were very valuable if we judge by their background and qualifications, to the preparation and presentation of this report? How can the Government expect to get men of this type to serve on committees in the future if they know that a report presented to the Parliament will be treated in this way and discussed only after months of delay? It is now about six months since the Vernon report was presented to the Parliament after these eminent gentlemen had given so much of their time to preparing it. The former Prime Minister declared that their recommendations were not acceptable. I do not see much wrong with some of the recommendations made by the Committee. For example, I see little wrong with the recommendations for the control of foreign investment in this country. I cannot understand why the Prime Minister of the day could not at least have gone more fully into the various aspects of this matter. As I have said, the Committee, in its report, dealt with prac tically everything worth mentioning or of any importance in relation to the economy of this country.

Migration came under review in one section of the report, and this section of the document was criticised in certain quarters because of the suggestion that we should restrict the intake of migrants to 100,000 per annum. If honorable members study the immigration figures of more recent times, they will find that over a period we have been averaging an intake of about 100,000 a year. In no recent year has the figure been much lower. I find it difficult to understand the opposition to the ideas expounded in that section of the report and I do not believe that this opposition can be substantiated. I consider that in Australia growth and development are tied to immigration to a degree possibly unequalled in any other country. The fact that the Committee has stated that it believes that in the immediate future we shall find it exceedingly difficult to maintain an intake of 100,000 migrants a year does not mean that the Committee attacked the migration programme. Rather, this portion of the report impresses on us the fact that a successful immigration programme calls for the provision of houses and many amenities and services without which no immigration scheme can succeed, particularly in this age. However, the Government has chosen to criticise this portion of the Vernon Committee’s report.

Various honorable members opposite have stated that many sections of the report are not acceptable to them. Doubtless this is because the report is based on a great deal of research and progressive thinking founded on new and bright ideas. We know, of course, that this Government has no great record in the adoption of new and bright ideas. Sir Robert Menzies, when he presented the report to the House on 21st September 1965, said, referring to the Committee’s proposal for the establishment of an advisory council on economic growth -

We unhesitatingly reject this idea.

He chose at the same time to reject many other recommendations in the report and, in doing so, to belittle the judgment and abilities of the group of distinguished men whom he himself had invited to undertake the task of inquiring into the economy, including senior public servants who were appointed to serve on the Committee. In a skilful speech studded with compliments to these talented men and their valuable report, which, he said, would be studied with profound respect, Sir Robert Menzies first reprimanded the Committee for exceeding its terms of reference by making recommendations on policy, while assuring his audience that the Government had no feelings of resentment at this having been done. He then proceeded to offer a number of specific criticisms or as he described them, “observations which might be helpful “.

I am sure, Mr. Deputy Speaker, that you are in agreement with that brief summary of the political background to the history of this report. I express the opinion, which has already been stated by other honorable members on this side of the House, that a wealth of valuable information and suggestions is incorporated in this report, which is the product of much research. It is a matter for regret that there has been great delay in the consideration of the report by the Parliament. It is to be regretted also that many of its most valuable recommendations have not received even passing consideration by the Government. Indeed, its policies in the last few months give no indication of a new approach - one might well say any approach - to the economic situation. There is no suggestion of any stimulating approach by this Government to the problem of accelerating the rate of Australia’s development. In this Government’s planning, even under the new Prime Minister, I see no indication that any part of the Vernon report has been adequately considered and its implementation decided upon.

It is all very well to praise the report and write down the men who were good enough to prepare it for presentation to the Parliament, and who gave up their time and talents to the task for months after being personally appointed and given detailed terms of reference by Sir Robert Menzies, and then completely to discard their recommendations. This shows that the Government has no concern for the general welfare of the economy or the people but prefers to play politics. I think the best that can be said is that this report was sought for political purposes and has been used as a political document for the purpose of saving face for this LiberalAustralian Country Party Government. A quarter of a million pounds was spent on the report, but this Government is not prepared to give effect to its recommendations, though they are valuable in every way to all sections of the Australian community. I have made these points so that the public will know of the attitude of this Government on important economic questions and will be aware that the recommendations even of a body composed of persons hand picked by it will be discarded regardless of the cost to the Australian people if they do not suit the Government.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– Mr. Deputy Speaker, I think it is always a delight to follow the honorable member for Grayndler (Mr. Daly) in a debate. He has been participating in debates in this chamber for well over 20 years, but only recently I heard a friendly comment about his debating activities in the 1930’s before he became a member of this House. Even then, he was accustomed to debating various issues. It was said that he could not make the debating team because he used to wave his arms about too much. I believe that in that respect he has not changed his habits over the years.

I now turn to the report of the Committee of Economic Inquiry, which is generally known as the Vernon Committee. A few things need to be said about this report, not only because of its virtues, which are considerable, but also because of its failure to analyse certain things. A little later, I want to make something of the fact that the Committee neglected to look beyond 1975. That will be a rather critical year, as I shall show. Since the report was presented, many criticisms of it have been made throughout the country by learned academics and quite talented journalists. We have, of course, the example of Professor Arndt, who, through his writings and contributions to various issues of current affairs journals, has been trying to drum up considerable support for the report. But one has to be fair and say that the best commentaries published on the report undoubtedly have been those contained in the “ Canberra Times “. Mr. Peter

Samuel, who is economics editor for the “ Canberra Times “, wrote a most penetrating analysis of the report, of its value and its lack of value in certain fields. An article by Mr. Samuel in the latest edition of the “Australian Quarterly” pinpoints some of the deficiencies of the document, and I think one should dwell on some of those deficiencies.

Before doing so, however, I point out that the central attitude of the Government has been that it rejects the proposition for a committee or an advisory council on economic growth. This attitude has fallen under rather strong and trenchant criticism from front bench members of the Opposition and even from the Deputy Leader of the Opposition (Mr. Whitlam), who, on this occasion, happens to have agreed with them. They suggest that we should set up in Australia a body similar to the Economic Council of Canada. This proposition has been advanced time and time again, but nowhere do they analyse the circumstances under which the Economic Council of Canada was set up. When one analyses these circumstances, it is clear that they do not apply in Australia and to that extent one has to reject the idea of an advisory council or committee on economic growth.

In the latest edition of a very valuable journal called “Australian Economic Papers, June-December 1965 “, Mr. A. M. C. Waterman of the Australian National University has analysed the situation with respect to Canadian economic growth in the post-war years. This is the sort of situation that gave rise to the need for the development of the Economic Council of Canada and the sort of thing we in Australia have said we do not want to have. Mr. Waterman stated that in 1963 it was said in a criticism of the Canadian economy by Professor H. G. Johnson in “The Canadian Quandary: Economic Problems and Policies “ -

First, I do not believe that “ growth “ has been Canada’s major problem: instead I believe that the outstanding problem of the past five years has been mass unemployment. Secondly, I believe that the problem of mass unemployment has been seriously aggravated by perverse economic policies ineptly pursued by the Canadian economic policy makers.

Professor Johnson was able to write that early in 1963. In concluding his analysis of Canadian economic growth, in which he quoted Professor Johnson, Mr. Waterman stated -

It is hardly surprising that by 1962 the Cabinet’s nerve was entirely shattered: the extraordinarily perverse handling of the exchange crisis and subsequent events serve only to illustrate the general proposition that a country gets the government it deserves.

I have given those quotations because they make clear the background to the circumstances that led to the setting up of the Economic Council of Canada. None of those circumstances has applied to Australia. Only now has Canada, rather belatedly, got her unemployment below the level of 5 per cent, of the work force. We in Australia have not approached that situation since the 1930’s. So if one looks at Canada and relates the proposition in the Vernon report for an advisory council on economic growth to the Economic Council of Canada, one finds that very little real comparison can be made between the situations in the two countries.

We come now to the general criticisms that have been made by the honorable member for Yarra (Dr. J. F. Cairns) and the honorable member for Melbourne Ports (Mr. Crean). The honorable member for Yarra gave an interesting dissertation on some of the strategies of economic growth. He made the point that between 1931 and 1951 the problem was to get economic growth at almost any cost. We had to get growth. From 1951 onwards, he said, the problem has been one of allocation of resources within the economy in which we are getting economic growth. I agree with this. I would not disagree with it for one moment. But there are shortcomings in this sort of suggestion. He then quoted Mr. Garner Ackerley, Chairman of the Council of Economic Advisors to the President of the United States. Mr. Ackerley has said that the problem is to get allocation of resources within an economy which is going through economic growth. With all this we agree. We know that Mr. Ackerley has promoted this kind of solution to the problem of economic growth in the United States. Whether for reasons of justice or for reasons of pursuing economic growth at any cost, the problems of allocations of resources in the United States are very critical indeed. In the United States they have mass unemployment. They have a situation of poverty in which nearly 10 per cent, of the population have unemployment or under employment - I am referring to the Negro problem. Any attempt to relieve poverty so as to develop a great society, even if the re-employed men are nothing else than work force additions to the economy, has to produce economic growth.

So the problem of allocation of resources in the U.S.A. is related very clearly to a level of poverty in that country. This is the central problem of American economic growth. Eliminate some of the poverty and you will have economic growth, even if you have no growth in productivity at all and even if you have no increase in the capital backing for each worker. But that is not the situation in Australia. Here we have something like 6 to 7 per cent, of our households at a poverty level. Quite apart from the injustice of that situation, which is very considerable, the major problem is that the reallocation of resources would not produce economic growth here in the same way as Chairman Ackerley says it would in the United States. So the honorable member for Yarra, in equating our position with that of the United States, has not, I suggest, properly understood the situation.

My very good friend, the honorable member for Melbourne Ports, in his contribution made the veiled accusation, as he did in his speech on the Budget last year, that the Government is devoted to a wage fund theory of wages. His being able to talk of a wage fund theory indicates that he knows something about economic history, but we are concerned with the present situation. The argument that he hinted at in his speech last night and to which he referred explicitly in former speeches is that wages in Australia are low and that productivity per worker has been rising very slowly in Australia because there is insufficient capital backing per worker. The burden of his submissions to the Victorian Industrial Relations Forum late last year and on other occasions was that the way out of this dilemma is to increase wages. In his submission, if you increase wages productivity increases and so on.

I do not think it is logical at all to compare wages as a proportion of national income or national product and to say therefore one country is paying more wages than another or one country at different times of its history has paid higher wages than another. If one wants to accept the theory which lies behind the contributions of the honorable member for Melbourne Ports in this respect, and I respect him very highly, one then has to say that this Government has done more with respect to wages than previous Governments because wages have been a higher proportion of national income and net national income under the Menzies Government, and the Holt Government of some weeks, than it ever was under Labour governments. Therefore, one could argue that the increase in wages and productivity on account of this factor was as high as it could possibly be. I think the whole balance of reasoning here is fallacious. I should think that the honorable member for Melbourne Ports, in his more sober moments - I do not say that with any disrespect - or on reflection, might agree with that kind of proposition.

The report of the Vernon Committee is a very large document and one has the suspicion that some honorable members have not completely read it. I know that the honorable member for Parramatta (Mr. Bowen) is very proud of the fact that he has read every chapter of the report. The report basically divides economic growth into two sectors. There is the growth in the work force and there is the growth in productivity per worker. The Committee makes its projections up to the year 1975 upon a growth of the work force of about 2.7 per cent, per annum. It assumes that the rate of growth of productivity will be 2.3 per cent, per annum. I may be slightly out in my recollection of those figures. The Committee does not assume that productivity will rise and so it argues that with this situation we can achieve a rate of growth of about 5 per cent, per annum between now and the middle 1970’s. But of the 2.7 per cent, per annum growth in the work force, which is obviously critical to the Committee’s calculations, about 1.4 per cent, will be due to the natural population increase.

I mentioned that the year 1975 was critical for these calculations because from 1976 the rate of growth of our work force due to natural population increase will decline quite sharply. I am referring to the sustained, the real and the chronic decrease inthebirthrateatthepresentwhichsug- gest that this is the most chronic, persistent and dangerous economic and social problem that Australia will have to face. By the late 1970’s we will not have a 1.4 per cent, addition to our work force from natural factors; it will be down to 1.1 or 1.0 per cent, and from all accounts the rate will continue to fall. So I suggest that the central problems that we will have to face are the need to keep a sustained and increased demand in the economy from a sustained increase, over the long term, of the work force and of a consuming force. Unless this problem is faced now, Australia will fall into serious trouble from the middle 1970’s, and I know many honorable members on this side of the chamber intend to be still here on the Government benches in the middle 1970’s. It is to be hoped that the Statistician, in assessing future increases in the work force, will not neglect these factors. The chronic problem which the United Kingdom has to face in trying to increase her rate of economic growth, which is nothing like ours, is the rate of growth of her work force, which is only about .4 per cent, per annum. The chronic problem which France faced for decades was a decrease in her work force and it was not until the work force started to increase in real terms that she began to have significantly higher rates of economic growth. I think we can benefit very clearly and in a very pertinent manner from the experiences of the older European nations in this respect.

There are one or two other matters upon which the report has not commented. The Committee has not dealt with the problems of determining short run fluctuations in the Australian economy. Australia has a number of regional economies. In my own State of Queensland there are five distinct regional economies which have violent seasonal fluctuations. A levelling out of these seasonal fluctuations would produce a real and sustained growth in the gross national product and in the Australian rate of growth. But the report does not deal at all with the problems of regional growth. It does not deal with the problems of cutting the bottom off short run declines in national product. I think honorable members realise that many more indicators will have to be constructed in order to deal with this situation. In the last pages of the report - as an addendum in a sense - the authors suggest a number of statistics that need to be gathered by the Statistician. Some will have to be gathered before we can deal with this problem. One would hope particularly that statistics relating to earnings drift in Australia will be compiled and evaluated without much delay. I regard them as extremely important.

One aspect of the economy with which the report has not dealt is, of course, the welfare aspect. It is anything but a bread and circuses report on the Australian economy. It does not deal even with welfare economics. But any attempt to deal with welfare economics which would cause in the long run a real and sustained increase in the Australian work force from the critical middle 1970’s onwards would make a greater contribution to our long term growth than any changed engineering of the resources which this report attempts to achieve.

Mr WENTWORTH:
Mackellar

– There are one or two questions in the Vernon report which relate to major matters in the economy and which I think the House might note. I refer to the remarks that have been made in regard to savings and the inflow of foreign investment. I listened with great regard to the speech made a moment ago by my friend from Queensland, the honorable member for Lilley (Mr. Kevin Cairns), and I felt that what he said about, for example, the changes in the work force has not yet sufficiently engaged the attention of the Government or of this House. I do not intend to traverse those matters. I commend the honorable member for what he said. I think he gave a most thoughtful and original analysis of some of the main factors.

If we look at our balance of payments on current account we are struck by the immense deficits which now seem to be occuring. I shall cite figures from the “ Treasury Information Bulletin “ of February 1966 on the balance of payments. For 1958 the deficit was $309 million; 1959 $385 million; 1960 $459 million; 1961 $737 million; 1962 $2 million; 1963 $476 million; 1964 $59 million; 1965 $784 million. It appears from preliminary figures that the deficit for the year ending 30th June 1966 will not be less than $1,000 million; it may even exceed that figure.

These deficits have been made good by capital inflow, because of which our balances in London have been kept up. But can this continue and, in particular, can it continue in its present undesirable form? The figures produced by the Treasury in respect of capital inflow show that today practically none of it is accounted for by Government securities and fixed debentures. On page 53 of the Treasury White Paper the figures set out show that the governmental inflow for the period from 1949 to 1965 was $312 million, balanced by an outflow on other official transactions of $128 million and by an outflow on account of marketing authorities of $62 million. The net capital inflow on the debenture account for the 17 years period is only some $122 million, or roughly $7 million a year. It is virtually a negligible figure. Practically the whole burden has been carried by capital inflow for the purchase of equities - the purchase of Australian real things. I think honorable members will agree with me that this is an undesirable state of affairs and that if we must have this capital, a great deal more of it should be coming in the form of fixed debentures, and a great deal less should be coming from sales of equities.

The Treasury White Paper shows that in respect of annual property income, the invisible debits have risen from $90 million in 1949 to about $400 million in 1965. The increase continues, so that it will not be long before the need to service foreign capital is in fact exceeding the capital inflow. This is the kind of debenture situation which all companies find dangerous and is one to which, perhaps, more attention might be given in our economy.

I agree that while we continue to have what I think is an unforgivable deficit on current account because of excessive imports and the need, which we have now imposed on ourselves, to service a large amount of foreign capital, we are forced on any terms to obtain foreign capital in order to carry on. We are mendicants and suppliants for foreign capital until we can get rid of the deficit on current account. Because we are mendicants and suppliants, we have to sell our equities on the market at the best price available as forced sellers until we can bring our balance of payments on current account into better shape.

I have read to the House some of the figures from 1958 onwards. They do not give us any cause for satisfaction or optimism for the future. If we study the figures, they may seem even worse than at first sight, because honorable members will recall that we are not as yet carrying our fair share of international defence commitments. We have to find more if we are to be safe and to continue to exist as a nation. Although it is true that we have been absorbing a considerable number of migrants, our rate of natural increase, as the honorable member for Lilley has told the House, has not been as great as it might have been. In a sense, an incoming migrant is a cheaper person to service in terms of capital equipment than is a child, because an incoming migrant does not require the same education and total maintenance as does a child while he is not yet ready to enter the work force.

It seems that we must make a great effort to cut down our imports and substitute for them locally produced goods. I appreciate that there are difficulties. Some people say that it cannot be done, but that is what is said by every man when he is told by his bank manager that his overdraft should not increase any further. There are all sorts of things which he cannot do without until finally he must do without them. There is need for a great substitution of local saving for the saving that we have been importing from abroad in the form of capital inflow which has been purchasing our equities. As it has purchased our equities, it has made it much more difficult for us to maintain balance in the future. We are in the position of a firm whose commitments for what it has borrowed in the past seem now to be preventing any possibility of its paying its way from current income.

We have had certain windfalls. There may be greater windfalls, particularly in view of the discoveries of mineral treasures which we did not put in the ground but which we are very lucky to have in the ground that we own. These mineral resources may come to our rescue. If there is no disaster and if we can maintain our existence as an independent country, the growth of population in Asia will call for considerably greater exports of foodstuffs and may give to our primary industries a bonanza greater than they are at present expecting.

But with all this we have got to be taking measures, as the Vernon Committee very rightly says, to increase our local rate of savings. It has been a failure of the Government’s financial policies to date that it has not faced up to this problem. It is not an easy problem to face up to; it is not a pleasant problem. In facing it, I think there must be a certain loss of electoral popularity.

What are the measures which we can take? In the first place, I think we must be taking measures to remove - not at one step, but progressively - the means test on pensions which has so greatly inhibited local savings. People say: “ Well, how can you do this? It will cost £130 million,” or whatever figure they like to pluck out of the air. It is true that there will be some additional expenditure, although it need not be this astronomical figure which has been blown up into fantasy by those who do not want the means test abolished. There will, however, be a considerable outlay, but, in the long run it will be more than balanced by the extra savings that will occur when the inhibiting effect of the means test is removed. But that is in the long run. The removal of this inhibition will not change saving habits overnight. If this is done in one step, although the eventual profit will exceed the eventual expenditure, over the short term the expenditure will exceed the profit. So it is probable that the phasing out of the means test in accordance with a not too lengthy but at the same time a not immediate plan is something which the Government must undertake if it is to bring our economy into balance and abolish this tremendous outflow of funds on current account which creates our dependence on overseas capital.

Last night the honorable member for Wakefield (Mr. Kelly) mentioned the need to change our taxation structure in order particularly to reduce the excess in what is called teenage spending so as to provide a savings basis also for those who are going to be married and who want to make provision for their housing, their furniture and for other capital expenditure which is unavoidable from the first year of marriage. So there again I would think that the Government should be considering some kind of special teenage saving, perhaps on a semi-compulsory basis, or perhaps on a voluntary basis, financed by some kind of special savings bond tailored to the special needs of the teenagers.

In addition, the Government might be doing something about the negative investment in debentures by companies which use their overseas credits, which are good, in order to borrow on the Australian market and thus acquire equities in Australia without bringing in any capital at all. One example I think would be General Motors-Holden’s Pty. Ltd. not only in relation to its manufacturing but also in relation to what it has done with regard to General Motors Acceptance Corporation, which is a hire purchase company related to the sale of its products. These companies finance their operations by borrowing on the Australian market, using their credits, which are unimpeachable credits, abroad. Thus they take out their borrowings in profits and they obtain equities in Australia without bringing any money in. This is something which the Government must have a look at.

The Government should be doing something, too, about the tax deductibility of interest on money borrowed in Australia by firms whose equity capital is held overseas. 1 shall be very disappointed if legislation along the lines I have suggested is not brought forward by the Government when the next Budget comes before us, or indeed, if it is not brought forward as an emergency measure, as I think it should be. I am afraid I have strained the patience of the House by speaking somewhat discursively on these matters but I think they are matters which should engage our attention. They are major matters of policy which seem to me to emerge from the considerations which are examined so competently and effectively in the Vernon report which is at present before us.

Mr CONNOR:
Cunningham

.- I listened with considerable satisfaction to the comments of the honorable member for Mackellar (Mr. Wentworth). Whilst ideologically undoubtedly there would be a chasm separating us, on matters of economics, particularly where the true and real national interests of Australia are concerned, we might share to some extent common ground because his comments, and his strictures, on the question of overseas investment certainly agree with my own views. I would commend to honorable members the perusal of a publication by an organisation which goes under the acronym of “C.EJJ.A.” - the Committee for Economic Development of Australia, which is sponsored by the major banking and industrial firms of Australia - namely its issue “Growth”, No. 6, containing details of foreign ownership of Australian businesses. The comment which is made on page 24 of that issue is particularly relevant. This is what the author, Mr. V. D. Gibson, said -

It is patently evident that a thorough examination by the Australian Government of its policy towards foreign capital is long overdue. Unless Australia throws off its inferiority complex and resolves to be master of its own economic destiny it can never achieve the title of a great nation for which its resources are ample and to which its people aspire.

Mr. Gibson provides some most illuminating evidence. We understand, of course, that something approaching 90 per cent, of Australian capital investment is generated from savings within this country. We know that the remainder is coming from overseas.

Let us have a look at the policies for the control of foreign investment in overseas countries. Take, for instance, India, a country which has just emerged in recent years into self government and which has probably the most formidable task of any major country in the world in terms of its economic development. There, although it is desparately short of capital, there are rigid controls on foreign investment. In fact, in some fields it is prohibited. In all others there is a requirement that the controlling interest in all new ventures must be in local Indian hands.

Let us now take the case of Japan, which, over the last few decades, has had phenomenal economic growth. There also we find that most rigid controls are imposed. For instance, whilst Japan welcomes overseas loans we find that companies with a majority of overseas ownership are refused guarantees for remittance of profits and capital. They are also -refused guarantees of compensation in the event of expropriation. But, despite this, foreign investment is still coming into Japan on a quite substantial scale.

Let us go now to the United Kingdom which is more internationally minded and tolerant than most other countries, and more sophisticated in its economic policies. Even there every endeavour is made to preserve the major British equity in its own industries. Take New Zealand where recently enacted legislation requires Treasury approval of takeovers by overseas companies. I do not think that I need quote to honorable members the situation in the Dominion of Canada and the economic problems that have arisen there by foreign domination of its industry. Even there the Canadian Government is doing its best to extricate itself from the,dilemma in which it has been placed by its own lack of wisdom or the lack of wisdom of preceding governments. In Holland approval is required for direct investment. In France government approval is required for direct foreign investment, and local participation is required in mining and certain other fields. Brazil, another country in dire economic circumstances, prohibits foreign investments in mines. Malaysia gives tax concessions to new industries which have a local majority ownership. Pakistan and the Philippines require a special licence for overseas investment without local equity.

To summarise the situation, I point out that, in all these cases, despite the varying controls, none of these countries has frightened foreign investors away, and few would have as much to offer the foreign investor as Australia does, even if we were to introduce a degree of regulation. I view uncontrolled foreign investment as a new form of economic colonialism which is substituted for the old imperialism. Armies of occupation are no longer sent to subject countries to exploit them. There is a much more select and sophisticated technique of ensuring that the dominating country is able to extract the profits it seeks to obtain from its investments. I would be the first to concede that there are many substantial benefits to be gained by certain forms of overseas investment. Having said that, I ask: What do we face? The warning appears in the Vernon Committee’s report. It is there, and the Government knows it is there, and resents its being there; namely, that we face a substantial degree of overseas control of our industry. We face overseas economic control; we face overseas dictation of our policy; and in the long term we will have overseas dictation and restriction of our national development.

I listened with great interest last night to the comments of the new Treasurer (Mr. McMahon) and whilst I was prepared to extend to him the charity and the courtesy of an impartial hearing I was quite frankly amazed. The man is an incorrigible optimist and the victim of his own propaganda. The whole of his speech, with due respect to the honorable gentleman, was an exercise in self deception. I will not weary the House by quoting excerpts from it but in toto it was merely a string of economic platitudes. It contained a marked degree of flippancy, of ineptness and of inefficiency. In substance and in form it typified the sloth and complacency of this Government. After all, we are in a new era. We are in the post Menzies era when new men of less stature have assumed the reins of government in this Commonwealth, and the crown is perhaps a little bit big for some of them and the shoes into which they have stepped are perhaps flopping around on their feet as well. It is quite certain that the former Prime Minister knew and deliberately timed with great precision the date of his retirement. He has left to this Government a very considerable legacy of economic trouble. The problems are very real.

It is only a matter of a week ago, or a little longer, since there was a mass deputation from the various manufacturing interests, the various importing interests, the Chambers of Commerce, wool growers, master builders, retailers, the automotive industry, and the whole gamut of industrial and economic activity within Australia to the Prime Minister and his individual Ministers to state their case for, as it has now been aptly phrased, a little more gravy in the Australian economy. The warnings that we of the Opposition uttered at the time of the 1965 Budget are coming home to roost. That Budget was a soak the sinners budget. It was deliberately designed to reduce consumer expenditure and consumer demand, and it has had precisely that effect. Because of that effect we had the encouraging spectacle, from our point of view in political terms but one which we greatly regret in terms of the welfare of Australia and the living standards of its people, of a mass onslaught to this Government asking that it face up to its responsibilities and drop its sloth and its living in a world of make believe and get down to the stark economic realities of 1966.

If ever there was a modern Micawber it is our present Treasurer, because of the confidence he exudes and the confidence he expressed when he said that the interests of the nation are likely to be best served if the pattern of economic activity is able to adapt itself freely to the changing pattern of national and economic demand. Micawber never did better than that. I should say that he has out Micawbered Micawber, and from this modern day Micawber all we can expect is a repetition of the near disaster that occurred in this country in 1960 and 1961. After all, we now have, shall we say, dual ministerial control. We have the former Treasurer who is now the Prime Minister and we have a Treasurer who is an economic hierophant and who, like the sorcerer’s apprentice, has learned part of the trick of producing rabbits out of the hat but does not know how to stop producing them. Most of those rabbits seem to be like those bred in the economic crises of 1960 and 1961.

After all, the Government is suffering from a reaction. It no longer has the national image of the former Prime Minister. It no longer has his prestige, his charisma or his mystique to shelter it from the wrath of the Australian people. We have taken with the retirement of the former Prime Minister a leap from the economics of 1960 to the realities of 1966, and this Government does not know how to handle them. Worse that that, it is saddled with the Vernon Committee’s report which is round its neck like an albatross and which will be there until the Government’s destruction at the forthcoming election. Two things will then destroy this Government. One is the economic effects of the drought and the other is the certainty of the resentment of the Australian people of the Government’s economic incompetence and its inability - its utter stark incapacity - to plan in terms of Australia’s best national interest.

The Vernon plan is an economic hair shirt, if I may change the metaphor, that this Government, Treasurer and Prime Minister will wear until the next election. It will be there as a constant irritant. I should say that 80 per cent, of the Vernon Committee’s report is acceptable to the Opposition. Its suggestions seem reasonable, practical and make common sense, but the technique of the big smear was adopted when the report was tabled in the Parliament. Goebbels used precisely the same technique. It was aptly said this morning by a radio commentator that the former Prime Minister did not like the Vernon Committee’s report and neither did the report like the Prime Minister. His reaction was a typical and obvious one. He was perhaps at the peak of his arrogance and petulance when he stigmatised the Committee. I remind honorable members of what he said when the report was tabled. He said -

It will, of course, at once appear to honorable members that, if the only problems in dealing with economic policy in a nation were purely technical, Parliament, which is not technical, and a Cabinet which is not technical might as well hand over to a group of technicians. In such a case democracy would have ceased and a technocracy would have begun.

That smear, that sneer, is still there and the Government is stuck with it. Last night the Treasurer attempted to wriggle out from under it a little, but the hard fact is that this is an age of technocracy, an age of planning, an age of stark economic realism. But the Government is living in the past. It has had a big brother to protect it, but now it has nothing other than the pygmies who have come in his place.

Let me deal in particular with one of the problems that has arisen and which this Government is utterly incapable of solving. I refer to the situation that has arisen within the Australian steel industry, which of course is of national importance and which has still a marked export potential. I should like to quote from a comment made by Sir Colin Syme, the Chairman of Directors of Broken Hill Pty. Co. Ltd. as reported in the “Sydney Morning Herald” of 2nd March. The report states -

The Broken Hill Proprietary Co. Ltd. foresees difficulties in keeping all sections of its plants operating at capacity levels during the remainder of the year ending May 31. . . .

It further states -

Recalling the annual meeting last September, Sir Colin says that he told shareholders of indications of an easing in demand for some types of steel. “Since then and particularly during the last two months these indications have become quite marked.”

Sir Colin went on to state the various factors that were responsible - the drought, a re duction in housing and a decline in automobile sales. He referred also - I particularly stress this factor - to steel imports. The report states -

Sir Colin says that a further factor is that substantial steel imports in the form of rolled products and manufactured goods - such as motor cars - are coming into Australia.

These goods are coming mainly from Japan, and the prices for rolled products must show a very low return to the overseas producer, he says.

These imports, coupled with the effects of the severe drought, have affected the demand for products of our largest customer, John Lysaght (Aust.) Ltd., and that company has consequently reduced its demand on us.

In 1962, when B.H.P. had some surplus capacity, export markets were available, but the current situation is entirely different as many countries have surplus steel capacity and are putting heavy selling pressure on world markets.

My comment relates particularly to the Japanese steel industry. The latest figures show that last year Japan had a total steel production of 44 million tons. Her internal consumption needs were 32 million tons, leaving an export surplus of approximately 12 million tons. Flat rolled steel products are coming into this country at dumping prices, but the Government cannot do anything about it. Certain types of steel produced in Australia are still able to compete on the export market. I refer to the bigger sections of steel - ingots, billets, blooms, rail and larger structural sections. But when the labour content is high, as in the end products like flat rolled steel - particularly the flat sheet steel that is used in the automotive industry - the Japanese have a competitive advantage. That competitive advantage is enabling them to undercut the Australian product. For the first time in 30 years John Lysaght (Aust.) Ltd. has had to make an application to the Tariff Board for the application of dumping duties under the relevant legislation. That application was made in December last, but up to date the Minister for Customs and Excise (Senator Anderson) has not decided whether to make a reference to the Tariff Board. I have sent telegrams to the Minister on the matter, but the replies I have received state that he has not yet been able to ascertain the selling price or the domestic production price in Japan and therefore has not been able to decide whether a dumping duty could be applied. Because the Japanese depreciated their currency in 1949 they are able to sell at a competitive advantage which cannot be detected under the terms of the existing legislation. I shall have much more to say on that matter when, at a subsequent sitting of the House, I deal with the Prime Minister’s statement.

Mr HOWSON:
Minister for Air · Fawkner · LP

– The honorable member for Cunningham (Mr. Connor) likened the Government to Micawber. At least members of the Government show a level of optimism in this place in contrast to the prophecy of doom that we always get from the Opposition. Nothing would please the Opposition more than a gradual decline in the state of the Australian economy.

Mr Peters:

– The Minister should speak plainly so that we may understand him.

Mr HOWSON:

– The honorable member always hopes that things will get worse. There are many advantages in being an optimist. This debate has ranged over a day and a half and is just about to end. Therefore, I though it might be useful at this stage to tie up a few of the loose ends. The first thing that emerges from the debate is that in the report of the Vernon Committee there is a tremendous amount of useful information that will be used, not only by the Parliament, but by other groups in the nation in the years to come. I do not regard this report as by any means being an albatross around our neck. Collated in it is information that will be of tremendous importance to all who have the guiding of the economy in the years ahead.

During the debate honorable members on both sides of the House have taken from the report passages which have seemed to them to bear upon their own particular theories. As the document consists of some thousands of pages it is not difficult to find in it some comments that are useful in supporting one’s point of view. Honorable members opposite selected passages that they liked to talk about, and the same thing has happened on this side of the House. That will igo on for a long time. What has been demonstrated is that the report is a collation of points of view and statistics that will be of importance to us all. None of us should be dogmatic about the report one way or the other.

I propose to refer to some important parts of the report that I found to be interesting. I thought that the chapter which deals with minerals and the mining industry was important. Mining will be one of the important parts of the national effort in -the years to come. Some very interesting facts about education were dealt with. I wondered just how much of that part of the report was the work of the whole Committee and how much was the effort of Professor Karmel, who has devoted a good deal of attention to this subject. I thought that quite a lot of this section of the report was reminiscent of other reports that he has published from time to time within the last few years. At least the information is summarised in this document.

The importance of apprenticeship training was emphasised in three or four different sections of the report This is a subject of tremendous importance. We have not done nearly enough in Australia to improve the level of apprenticeship training and the general retraining for industry that is necessary in a changing and flexible economy. I thought that the chapter on research and development was too short and that more information could have been given about this very important sector of the economy. I thought that the chapter on the conciliation and arbitration machinery was important. It certainly illustrated the many problems that face the Commonwealth Conciliation and Arbitration Commission and that are involved in the determination of the basic wage from year to year. Neither side of the House would agree with all of the conclusions in the report but I think the report is important because for the first time the issues have been spelled out. From now on we can give more thought to the problems involved and to the ways in which they may be solved in the future. At least we know now that we can improve the present system. I do not say that I agree with the recommendations of the Committee but at least it has given us some guide lines that are worthy of investigation. All these things are important.

The one thing on which we disagree - I am sure we will always disagree on thisis the Committee’s final Bumming up, together with appendix N. These have been the subject of a good deal of debate in the past few months. It is around the matters raised in the summing up that most of this debate has revolved today. Let me deal with the subjects that have been hammered in the last 24 hours. First, there was the subject of overseas investment. This matter was particularly well handled from this side earlier this afternoon by the honorable member for Parramatta (Mr. Bowen). I should like to add to the honorable member’s remarks only by quoting from the Giblin Memorial Lecture delivered by Mr. Brian Reddaway, a Cambridge economist, and reported in the “Economic Record” of December 1965. Mr. Reddaway taught me economics about 20 years ago, so I pay some attention to what he says. On the subject of overseas investment he has these final thoughts to put, which I think deserve the attention of honorable members -

The profits payable overseas are a part of the value of what is produced and sold by the relevant enterprise. Many enterprises which are established in Australia can only function if they have some flow of imported material, which will also represent a part of the value of the finished product We do not point to the danger to the future balance of payments from the establishment of an oil refinery because this will involve future payments for imported oil if the refinery is to function. Should we, then, object to its establishment on the grounds that its operation will entail a flow of payments to overseas proprietors?

Mr. Reddaway sums up his ideas on the matter in this way -

To assert that there will be no difficulties in maintaining a healthy overall balance of payments would be absurd; but to my mind it would be equally absurd to assert that, with reasonable management of the Australian economy, these difficulties will be so incapable of solution that they will prevent a growth in the real national income at the same sort of rate as or better than has been experienced in the last decade.

What he says is that the pattern of overseas investment in Australia in the last 15 years is likely to be maintained in the next 15 years. If this nation has developed in this past period in the way it has due to the policies it has followed, why should the situation alter completely in the next period? What the Vernon Committee has said would seem to indicate that the past is not a reliable guide to the future. Mr. Reddaway has said that there are many pointers to indicate that the past has some useful guides to the future. I would tend to agree with Mr. Reddaway. I would rather be an optimist in this matter than lapse into the dour distrustful mood in which the honorable member for Cunningham appeared to be a few minutes ago.

The honorable member for Mackellar (Mr. Wentworth) raised the subject of local saving. This matter was dealt with thoroughly by the Treasurer (Mr. McMahon) last night. I cannot agree that the abolition of the means test is the only way to improve local saving. All of the facts surrounding the behaviour of the nation during the last few years tend to dispute the theory that the abolition of the means test would improve local saving. The theory is that with a means test people who will not receive pensions are not induced to save. All the facts indicate that there has been increased saving by this portion ot the population during the last 15 years. As the Treasurer pointed out last night, savings by the Australian community represented 26i per cent, of the gross national product last year. This is a figure seldom achieved in the postwar era by any other western nation. So I believe there is no need to worry greatly, as some people do, about local saving.

An important aspect of the Vernon Committee’s findings dealt with growth. As I read the Committee’s report I wonder why it settled for the magical figure of 5 per cent., unless it was because the Australian Labour Party adopted 5 per cent, during the last elections. I suppose this was as good a reason as any.

Mr E James Harrison:

– A growth rate of 25 per cent, over five years was part of the Government’s policy.

Mr HOWSON:

– I think the Government chose 4i per cent, and the Opposition chose 5 per cent

Mr E lames Harrison:

– The Government chose 25 per cent, over five years.

Mr HOWSON:

– At compound interest that is not 5 per cent, a year. It is a lower figure. Why must we settle on the magical figure of 5 per cent.? Industrial growth is the chief factor on which the Committee concentrated. Because the Committee wanted a growth rate of 5 per cent., population growth had to be curtailed. We would have to restrict our population in order to improve our standard of living. Is this what Australians really want? At a time in our history when we are able to attract migrants in large numbers - about 150,000 a year - should we refuse to accept them because we want to improve our standard of living at the expense of taking migrants? All of these things are important but we must take the long view. If we are able to get migrants now we should encourage them, even if it means limiting in some way our growth rate and the improvement of our living standards. It may happen that at some time in the future the flow of migrants will dry up. At such a stage other factors affecting our growth rate can be considered. I do not think that because the Committee fixed on the magical figure of 5 per cent, we should abide by it and put the rest of our economy into a strait jacket. This is what would be involved if the full recommendations of the Committee were adopted.

Finally, a great deal of attention has been given to the subject of planning. I would like to comment on some useful remarks which were made by Mr. John Brunner in a lecture which he delivered to the Marshall Society a few weeks ago dealing with British planning at the present time. I think that some of his comments are interesting. Amongst other things, he said -

The self-defeating character of published economic forecasts can also afflict more formalised predictions such as those of the Board of Trade’s regular investment intentions survey. If firms learn that capital expenditure is due to be cut back x per cent, next year, they may easily decide to reduce their own capital commitments more or increase them less than they had originally intended. The result may be that the actual fall turns out nearer 2x per cent.

Therefore, there are dangers in too tight forecasting in a mixed economy, which exists both in the United Kingdom and Australia at the present time. Later on he said -

Even if one accepts that for some reason yet to be vouchsafed every firm in the country does in fact accept the overall targets decreed both for the economy and for its particular industrial group, how is the individual company to interpret this intelligence for its own policy? The point here, of course, is that these targets have little meaning without some mechanism for allocating market shares, a problem which is very well illustrated in the plan itself. lt is, of course, precisely this tendency towards the promotion of comfortable restrictive practices for market sharing purposes that lends a certain attractiveness to target setting of this kind in the minds of some producers. It is also, of course, a good start along the road towards ossification of the industrial structure through the effective reduction of competition.

I believe that in the mixed economy that we have in Australia there are many dangers in the sort of detailed planning that has been advocated by the Opposition. This expert from the United Kingdom points out some of the things that happen in practice as against what should happen in theory, according to economists. I think it is useful to take the opportunity to look at what has happened to other people who have adopted some of these plans. In this way we can see the pitfalls before we embark on the course that has been suggested by some of the speakers in this debate.

Finally, there was a recommendation in the Vernon Committee report for the establishment of an outside economic advisory body that should loftily pontificate from year to year on what is happening inside the economy and what should happen in the years to come. Surely the Government must accept this responsibility itself. As the Treasurer (Mr. McMahon) said, the aim should be for the Government to get together with all the important sectors of the community and receive advice from them. But having received the advice, surely it is the Government’s job to decide on the policy to be adopted. We should not have a body outside the Government, with no responsibility for the consequences of its actions, being able to sit aside loftily and say to the Government: “ You are making mistakes “. This body would not have to accept any responsibility for the results of any action that might be taken as a result of the advice that it tenders.

I believe that while we have a government, it is the government’s job to carry out its responsibility, after listening to the advice that is given to it. That is why I think the Government has quite rightly rejected the main conclusions of the Vernon Committee’s report. I believe that we have been quite right in pointing out to the nation the dangers that would flow if we adopted all of the Committee’s recommendations. I think that I have summed up the main issues that have been raised during the course of the debate, but I believe that we shall be looking at this report for many years to come and making quotations from it as it suits us.

Question resolved in the affirmative.

Sitting suspended from 5.50 to 8 p.m.

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INTERNATIONAL AFFAIRS

Ministerial Statement

Mr HASLUCK:
Minister for External Affairs · Curtin · LP

– by leave - Mr. Speaker, before we start debating what we are doing or what we ought to do in Australian foreign policy let us face plainly the fact that there are two things we cannot do. We cannot change Australia’s geographical situation and we cannot cancel out the great forces that are bringing massive changes in the world today and particularly in the southern half of Asia. We in Australia are living on the edge of a great upheaval both in human relations and in the ideas which influence the conduct of mankind. We cannot withdraw from this region and we cannot do anything to prevent the upheaval.

The Australian foreign policy, developed in this setting, must protect and advance Australian interests. This does not mean isolation, which would be equally foolish for us whether we chose it as a policy or whether we drifted into it through lack of care. We have to ally ourselves with others if an Australian policy is to have any effect. We need allies for the sake of our own security. We need allies so that the principles which we regard as vital shall prevail. We choose the principles on which our conduct is to rest and, having chosen them, we stand with those powers who will help maintain them. We examine the dangers to our own security and stand with those who will help us face those dangers. Then we must learn to be a good ally ourselves - to be ready to help as well as be helped. We do not want simply to stand in the shade of any nation. As a small, independent and resolute people we have chosen whom and what we will support and whom and what we will resist. We rely on others and trust they can rely on us.

Our foreign policy is based on a proper concern for the security of our own nation, on a belief that certain principles of international conduct must be observed in order to have fair and honorable dealings between nations and peoples and in order that peace may be achieved in the world, and on a belief that certain conditions will be more conducive to peaceful relations between nations and to co-operation for mutual benefit than other conditions.

The danger to Australia’s security is twofold. There is the danger of global war. If it occurs this will probably turn into a nuclear war in which the whole of mankind will suffer. That danger of global war is being averted by the diplomacy of power and, although not a great power ourselves, we have a part to play in the diplomacy of power. A more direct danger is presented to us by the active and belligerent fact of Asian Communist imperialism. This is being held in check by the resistance of the free countries of Asia, helped by nonAsian countries, including ourselves.

For the sake of our own security we will continue to support the United States and its allies in maintaining the restraints of power against the two other great aggregations of power, while hoping that throughout the world success in containment of power will be followed in all cases by attempts to develop the conditions for co-existence. We will continue to support, both in the forum of the United Nations and in all situations in which the organs of the United Nations have any capacity to act, the standards of international conduct set out in the Purposes and Principles of the Charter. We will continue to apply the same principles in all our other international dealings.

We will continue to support the resistance of free countries to external aggression aimed at the overthrow of their independence and we will join in cooperative measures for the common security of the region in which we live. Recognising that security is only the beginning and not the end, we will continue to work with others for the economic and social advancement of the peoples of the less-developed countries.

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AUSTRALIAN POLICY IN ASIA

What I have said hitherto applies to the whole of our foreign policy. I want now to trace the application of this policy in

Asia. We do not imagine for a moment that we or any other power can turn back history or cancel the changes taking place in Asia. We have carried out for many years past, both under my distinguished predecessors and in my own term of office, a policy that respects the neutrality of those who choose to be neutral and respects the sovereignty and independence of all Asian powers. 1 believe that this side of our policy has shown some considerable success. We value today the regard and respect of our Asian neighbours and their co-operation in various common enterprises.

We want to see an Asia free from fear and insecurity in which the independent nations will be able to develop for themselves the kind of society and the forms of government that they believe are best suited to themselves, where human welfare can be advanced more rapidly, and where economic progress will strengthen the me :ns by which each country will be able to support its own independence. We want to see the conditions in which such free and prosperous nations will be able by their own decision to co-operate more fully in measures for common welfare and security. This means that it must be an Asia free from the domination of any single great power and safe from the persistent subversion of a communism which is being used deliberately as an instrument of imperialist power.

It is plain that a foreign policy of this kind requires Australia to know as much as it is humanly possible to know about the facts of Asia, to enter as closely as it is humanly possible to enter into friendly contact with the peoples of Asia and to study with a clear vision all the facts we gather and to maintain in friendliness all the associations we form.

Our whole interest as Australians is in the advance of all the peoples of this region to a new and brighter future of freedom, independence and opportunity. What threatens this freedom and independence and what dims their hope for the future is the dread of domination by the new imperialism of China and the throttling grip of Communist aggressors, lt is the Communists who have themselves announced their plans. Are these so-called liberation fronts - the National Liberation Front of

Vietnam, the Malaysian Liberation Front or the Thailand Liberation Front, all of whom have lodging and blessing in Peking - created to ensure that the peoples of Asia will be free to choose for themselves? Of course not. They have been formed and dedicated to the purpose of bringing these countries, without free choice, under Communist rule. Marshal Ky, Prime Minister of South Vietnam, spoke the plain truth when he spoke of the National Enslavement Front.

The story favoured by the Communists gives a false picture of Asia today. We are not engaged in the rearguard struggle of a doomed colonialism. We are taking part in the establishment of conditions which allow independent nations to exist and prosper in Asia. Free Asia needs the reinforcement of the free world. It was essentially Western power, allied with the growth of South Korean strength, that successfully repelled Communist aggression in Korea - so successfully in fact that the Government of the Republic of Korea is today able to contribute substantial forces for the defence of South Vietnam. It was the British military presence in the Malaysia-Singapore area, with help from Australia and New Zealand, that helped Malaya to overcome the challenge of the Communist terrorists. It is this same military strength which is helping Malaysia to resist Indonesian confrontation, despite all the psychological and political devices used in the confrontation campaign to undermine the will of the Malaysian people. Britain’s presence in the MalaysiaSingapore area continues to exercise its historic role in stabilising the area, and it is sanctioned by the consent and goodwill of the people of Malaysia and Singapore. Japan and the Philippines have freely negotiated defence treaties with the United States which recognize that their national security is linked to’ the power of the United States. The central issue, common to all these situations, is that the freedom and independence that the nations of Asia have won with the end of the colonial era can be preserved and that they can choose their own future.

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QUESTION

VIETNAM

I turn now to look at the most critical centre of conflict in Asia today - South Vietnam. I submit first to the House and to the people of Australia that we cannot see that conflict clearly if we look only at Vietnam. This is not only a local struggle. It continues to harass the thoughts of compassionate people in all lands, and attempts to find a settlement fail because it is so much more than a local struggle.

Behind Vietnam lies a wider conflict that extends from the northern frontiers of India to the dividing line in Korea; that engages the worldwide diplomacy of the Soviet Union no less than the worldwide diplomacy of the United States; and that casts the shadow of fear over millions of people in all lands of southern Asia no less than the shadow of terror over the villagers of the Mekong delta. This is a war that affects the fate of all countries of South East Asia - a war that throws into sharp relief the aim of Communist China to dominate them by force. These are things seen most vividly and felt most painfully by the countries of the region.

We do not imagine that a lasting arrangement can emerge in Asia which does not take account of what exists on the Chinese mainland. That is not the same thing as immediate recognition of Communist China or its admission to the United Nations. Those are simply parts of the whole question of China. What we are trying to do is to establish and make clear the conditions whereby China and the countries of the region can live peaceably side by side. One essential condition is that there should be no Chinese domination attempted by force or threat of force. We and other nations are standing up for that principle now in Vietnam.

It will take time - indeed, it may take a very long time - to reach an accommodation with China. China itself must make some response and make some movement towards accommodation. Some persons, Australians and others, talk of recognition and of United Nations membership solely in terms of action by us and countries that think like us. But China itself would have to contribute something. Any acceptable accommodation will have to provide for the independence and security of China’s neighbours and must not involve abandonment of Taiwan.

Communist China is a big country in area and population. It has substantial forces, and a revolutionary policy both inter nally and internationally. But we should not allow ourselves to be bemused into thinking that Peking has been uniformly infallible or successful. What is its record? It has brought together in certain respects the Soviet Union and the United States, by its clumsy and doctrinaire threatening of both. China has alienated a large part of the nonaligned world by its treacherous armed aggression against India and by its bullying tactics at Afro-Asian gatherings. It is not a record of success. It is a record of miscalculation and failure. If we hold on with courage to resist aggression while pursuing positive policies of political and economic development we shall win through.

What we, who are on the fringe of the region, are also concerned about and what we hope that all nations in all continents will be concerned about is that events in Asia are also a threat to the peace of the world. They present today to the world the greatest risk of global war. Indeed, over thirty nations have seen this and are giving some support to South Vietnam in its struggle. Are they giving enough? If they see that their fate and their future are also involved in the present struggle, if they see that the aggression that has to be resisted and the principles of the United Nations Charter which have to be upheld in Asia today are the same as those that lie at the core of peace in every continent of the world, should they not do more? This struggle to save freedom in Asia is the struggle of the whole of the free world.

Sometimes unfortunately any statement about the risk of global war arising in Asia is translated only into a fear of escalation or a fear of provoking those from whom the threat comes. The real risk lies not in the fear of provoking Communist aggression: It lies in any failure to block it. The damage to the principles on which alone peace can be founded is done by neglecting them, not by applying them.

The character of the war in Vietnam is appearing more starkly as the months go by. As operations proceed and the attack on the Vietcong uncovers more of the enemy strength, the old fiction that this was just a band of rural patriots fighting with weapons captured from their oppressors becomes more ridiculous than ever. As underground headquarters, large dumps of supplies and weapons, and the organisational structure of the Vietcong are revealed, it becomes plainer than ever that this attack has been prepared in breadth and in depth and organised with professional skill over a period of years and that year by year more and more sophisticated weapons of foreign Communist manufacture have been fed into South Vietnam from the North. I saw myself in Saigon a few days before Christmas photographs of one of the wellprepared underground headquarters of the Vietcong and I have talked with Australian soldiers who cleared these redoubts. I saw in Saigon literally thousands of weapons captured from the Vietcong and alongside them other military and semi-military supplies from Communist China and Communist Europe. South Vietnam is not opposing a local band of dissident citizens but the deliberately created and well organised instrument of North Vietnamese aggression. In all, the Communists have at least 80,000 regular troops, some 120,000 guerillas and some 18,000 men in administrative and support troops. As more and more of the enemy are captured or defect, unit identifications and interrogations help to give increasing precision to our knowledge of enemy strength. The Vietcong have perhaps as many as fifteen regiments of their own which have been established and trained with the help of North Vietnamese cadres and increasingly armed on Chinese equipment. Among the Vietcong there is an ever growing proportion of men infiltrated from the North. In all, over 60,000 men have been infiltrated from the North since 1959. Included in this figure are 18,000 men in regular units of the North Vietnamese Army. There are now nine and probably more regiments of the North Vietnamese Army in South Vietnam. These regular units are being reinforced from other forces of the North Vietnamese Army illegally stationed in the eastern parts of Laos.

We now have a much more realistic knowledge of the enemy as a result of the more intensive fighting, the greater difficulty of concealment by North Vietnam and the knowledge progressively uncovered of the long preparations and planning of the other side. The challenge is being faced today with a better assessment of what it is and a clearer determination on how and where to meet it. There are now about 300,000 men in the regular forces of South Vietnam, which is a significant increase in the past six months. There are now more than 215,000 American troops in Vietnam, supported by forces from Korea, Australia and New Zealand totalling some 20,000 men. As announced last Tuesday by the Prime Minister (Mr. Harold Holt), the Australian Government has decided that the battalion now in South Vietnam will be replaced by a self-contained Australian task force under Australian command of some 4,500 men. The Philippines Congress is at present considering a proposal by the Philippines Government to despatch an engineering construction battalion supported by security forces. To make possible this buildup of strength, ports of entry and bases have been established and secured at points along the coastline of South Vietnam. The ocean approaches are securely controlled and the United States is also able to make a vast use of aircraft and helicopters, both from carriers and land bases.

One other part of the character of the conflict is also being revealed more starkly than before. Up to date, as honorable members know from statements previously made in this House and by documents published, the enemy has not shown any interest in peaceful settlement by negotiation. Early this year further overtures were made. The bombing of North Vietnam was suspended for 37 days. Although an earlier pause in bombing last May had evoked no response from the enemy the United States was willing to try once again to demonstrate its readiness to end hostilities if it could see hope for a just solution by peaceful means. Governments of Communist countries and of non-aligned countries which might possess some influence in Peking and Hanoi were approached. Direct contact with the Hanoi regime was made in some capitals where the United States and North Vietnam were both represented. All these approaches were summarily rejected. Peking, Hanoi and the Vietcong prefer war. Let us face that plain fact. They prefer war. They have chosen war. They said so in plain and angry words. They denounced American efforts for peace. It was under these circumstances that restrained bombing of the North was resumed.

I should like to say something about the bombing of the North. The original decision by the United States to begin bombing of North Vietnam early last year was not taken lightly. Indeed, so strong was the desire to avoid spreading hostilities and destruction that the decision to undertake bombing was delayed far beyond the time when, on military grounds, it became justified. The simple fact is that for some years the Vietcong - armed, supplied, and directed from North Vietnam - have been waging a campaign of terrorism and guerilla warfare in the South while the North was left untouched. The point was reached where we could no longer ask the people of South Vietnam to sit and take it and fight the Vietnamese Communists only at the places of the latter’s choosing. The three objectives of bombing, as defined at the outset by Mr. McNamara, the United States Secretary of Defence, were first, to demonstrate to the South Vietnamese that they could depend upon American support; second, to reduce the flow of men and equipment from the North to the South and/ or to increase the cost of that flow to the North Vietnamese; and third, to put political pressure on North Vietnam to halt their campaign of subversion in the South by demonstrating to them that they had no chance of success.

Notwithstanding the limited purposes of the bombing, its suspension meant real sacrifices from a military standpoint. The evidence is clear that the North used the month-long lull to repair damaged infiltration routes and bridges, to send men and material to the South more freely and to recover from some of the losses that had been inflicted on them in the South. The lull in the bombing was a liberal declaration of the sincerity of the search by the United States for negotiations for a peaceful settlement. They paid, and paid heavily, for their forbearance by the advantage the enemy took from the lull and the sad fact is that the pause failed to bring negotiations in sight. The Australian Government supported the eventual decision of the United States to resume the bombing.

While on our side the search for peace will go on, the prospects are - let us face it soberly - of a long and difficult struggle in Vietnam. The possibility of military victory has been denied to the Vietcong and the North Vietnamese armies supporting them. They do not have the logistics or the fire power to defeat the South Vietnamese and their allies in open battle. They can no longer hope to bring about the disintegration of the forces opposing them by rapid attack and dispersal with light losses to themselves. They will try to wear us out. They will try to undermine our resolution. This has become a test of will. It is also a test of faith. In countries such as our own and the United States the questioning, the search for some way for peace, will go on. It is our pride as a free people that this questioning and the public debate can take place. But, while we debate, let none of us forget the central issues which are at stake.

Some people who think that we should negotiate and not fight address all their persuasions to the United States. In that quarter no persuasion is needed. The United States has demonstrated again and again its readiness to talk. The need is for some persuasion to be urged on Hanoi, which has hitherto shown a total unwillingness to talk, a total disregard of any overtures, and a clear preference to try to obtain its own ends by force and to unify Vietnam under Communist rule regardless of the wishes of the people of the South. On our side we have done what we can to bring Hanoi to the conference table. We would prefer to talk than to fight. But if we are to make real progress towards a peaceful solution, our policies for peace must be conducted with great care and realism and an unfaltering firmness of purpose. This has been the lesson in all the efforts to negotiate with the Communists in the successive post-war crises. We must avoid the risk that eagerness to find a peaceful solution may lead to adjustments in our own position which come perilously close to yielding ground that must not be yielded. We must also avoid the risk of raising doubts and adversely affecting the morale of those who live in the region - not simply in Vietnam - and the morale of those who have committed their lives and the future of their families to the successful outcome of the struggle. Many are in free countries which are even closer to the conflict than Australia and are now under direct pressure.

My final word on this is to say that talking is not an objective in itself, but a means to an end. We have to be vigilant lest the idea of talk for its own sake leads us into traps and quicksands. What is the purpose of talking? Surely it is the same as the purpose of our present fighting; to stop the Vietcong from terrorizing the people, to enable the people of Vietnam to make a free choice of their future, and to prevent the Communist aggressor from taking over by force yet another country.

Any reference to negotiations raises the question of whether the United Nations can play a useful role. Honorable members will be aware of the attempts made by the Secretary-General, U Thant, to bring about discussions, and they will also be aware of the lack of response to his attempts. They will also be aware of the view U Thant has expressed that at the present juncture he does not see any useful possibilities in involvement of the United Nations in the Vietnam conflict. They will be aware of the action of the United States in bringing the issue to the Security Council. The history of all those attempts reveals that in present circumstances the United Nations has little or no chance of being helpful.

In moments when we declare greater resolution - the Prime Minister’s announcement was, in the clearest possible terms, a declaration of Australian resolution - we need to be clear about our aims. Our aims are to defend South Vietnam, to preserve its security and to allow it freely to determine the economic and political system it wants. We have no military designs on the enemy, who has himself flouted the Geneva Agreements, other than to deter him. We are prepared to accept the present authorities in North Vietnam as they are, to work with them and to have them share in programmes for economic development in South East Asia. Nor is it our aim to prevent South Vietnam and North Vietnam from coming closer together after fighting has stopped. It is their business, if they wish to, to establish links and develop practical co-operation. In addition, we recognise that a strong and pervasive sense of Vietnamese nationalism, provided it is not turned against its neighbours, can be a positive good in strengthening the sense of national independence among China’s southern neighbours.

Our aims in South Vietnam are limited, but they are clear, they are steady. They are in keeping with the commitments which were entered into more than ten years ago when the Government declared that it “ would view aggression in violation of the Indo-China settlement as a threat to international peace and security “ and agreed that South Vietnam should come under the protection of S.E.A.T.O.

I have dwelt at some length on Vietnam because I believe - and the Government believes - that these simple and plain truths need to be stated repeatedly and firmly. It is all very well for the critics and the doubters - wholly sincere as I know many of them are - to plead for negotiations. They are understandably unhappy over the loss of life, the waste and the brutalising effects of a protracted war. We are all unhappy about those things. But the critics have no solutions of their own which can be accepted with honour and’ with prudence; they have no practical formula for bringing the parties to the negotiating table; they have no course to propose as a genuine alternative to the one which we are pursuing.

Australia is part of this struggle because we cannot allow it to be lost by default. We are not in it at the behest of any nation or group of nations. We are in it by our own choice and our own decision because the result is a matter of crucial importance to us, to all the people of Australia.

The leaders of South Vietnam face enormous problems in repairing the devastated economy and giving hope to a society which is disrupted by terror and wearied by suffering. But they show a heartening awareness of what needs to be done and a heartening strength of purpose. On my visit to Saigon in December I found the Government of South Vietnam more realistic and purposeful compared with some of its predecessors. President Johnson was similarly encouraged when he met these leaders in Honolulu. They are young and vigorous nationalists, attached to no traditional form of privilege or to vested interests, who accept the need for reform and development. They accept the need for foreign aid and help, and the Australian Government for its part will continue to do all it can to provide it. I commend to honorable members the statement of the purposes of the Government of Vietnam contained in the recent Declaration of Honolulu.

Mr HASLUCK:
LP

– We are giving quite considerable economic aid to Vietnam in the current year, something of the order of $A3,000,000. 1 wish that some of the honorable members opposite who are interjecting could have the opportunity to visit Vietnam to see the way in which, on the civil side, their fellow Australians - medical men, nurses, teachers, engineers - are making a notable and much appreciated contribution to the reconstruction and rehabilitation of that tortured country. It would make them much prouder than they appear to be of being Australians.

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E.C.A.F.E

Although Vietnam occupies much of our attention. I would again remind honorable members that our policy and diplomacy in Asia cover many other fields. I wish to report to the House some of the more recent developments in the range of multilateral and bilateral relationships we are building up on the economic and social side. ) shall start with the Economic Commission for Asia and the Far East. Since Australia became a regional member of E.C.A.F.E. three years ago we have played an increasing part in its activities. 1 attended the last session of the full Commission and T intend to attend the next session in New Delhi in a few days’ time. In our participation in the work of E.C.A.F.E. we are seeking to be good neighbours, in a practical sense, by pooling our experience and expertise in matters of economic development for others to draw on it as they deem appropriate. In return, we profit by the access E.C.A.F.E. affords us to the knowledge of other members of the region.

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ASIAN DEVELOPMENT BANK

E.C.A.F.E. had a large share in fostering an important new regional initiative - the Asian Development Bank, which is expected to begin operations later this year. As honorable members know, I led the Australian delegation to the Ministerial conference in Manila last December which approved, for ratification by governments, the Articles of Agreement of that bank. It has long been recognised that a major obstacle to economic progress in the Asian region is the lack of capital to finance development projects. The Asian Development Bank will help to make good that lack, and to this end the Australian Government proposes to contribute $US85 million to the Bank’s working capital. As already indicated, the Government will introduce legislation to authorise ratification of the Articles of Agreement of the Bank. Once our ratification has been approved and the Bank has come into existence we shall expect to play an active role in its work.

U.N.C.T.A.D

Australia is also taking an active part in the United Nations Conference on Trade and Development. U.N.C.T.A.D. is now an established feature of the United Nations machinery and its permanent headquarters and secretariat are being set up in Geneva. We in Australia ourselves know, from current experience, many of the difficulties that face developing countries. We know the problems inherent in developing an industrial base while a country is still very heavily dependent on the export of a limited range of primary commodities; and because of this we have not found it difficult to understand many of the desires which have found expression in U.N.C.T.A.D. and to contribute a very worthwhile part to the development of that Conference.

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DEVELOPMENT ASSISTANCE COMMITTEE

Australia has become a member of the group of donor countries which constitute the Development Assistance Committee of the Organisation for Economic Co-operation and Development. The Development Assistance Committee is the recognised forum for discussion of aid policies and practices among the major donors of aid. Today Australia can count itself among the major donors of aid to other countries. The Committee includes a number of European countries, the United States, Canada and Japan. We have felt that we should, if possible, put ourselves in a position to benefit from regular discussion with the other major donors and to contribute our own not inconsiderable experience and our views to the common pool.

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FOOD RELIEF FOR INDIA

At this point I should mention one other important decision in the field of aid - the decision to make a special contribution to the value of SA8 million to India for the relief of what is expected to be a critical shortage of food in that country in 1966. This gift is additional to the contribution which Australia makes to the long term economic development of India from our regular annual aid appropriations. The Government has gladly made this emergency contribution, which follows a similar emergency contribution last year, and I am pleased that it is being supplemented so substantially by the voluntary efforts of Australian churches and private organisations.

At the same time I am bound to observe that the responsibility for assisting the people of India in their hour of need must necessarily rest with the international community as a whole. Too often those countries, such as Australia, which produce the commodities which India requires are regarded as bearing the main responsibility by reason of that fact alone. This is not, I may say, a view which is prevalent in India itself. But I have found it expressed in surprising quarters elsewhere. In the view of the Government, there is no less a responsibility on the great industrial countries than on the food producing countries. Because they do not have food to offer, their contribution can and should take other forms, including assistance with foreign exchange to enable India to buy food on the world market. If other countries were to contribute in the same proportion as Australia - over and above their normal aid expenditure - then the international effort to aid India would look much better than it now does.

Apart from special non-recurring contributions of this kind, Australia’s regular aid programmes are continuing on a scale which is comparable to that of most other aid donors. As to their effectiveness, I would say that it is my constant aim to improve our performance; in other words, to get full value in aid for the money that is so generously provided. During my recent visit to South East Asia I saw in Thailand, Laos, Cambodia and Vietnam unmistakable evidence of the importance with which our aid is regarded and of the successful completion of several big projects, often in difficult and dangerous circumstances.

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MALAYSIA AND SINGAPORE

I have been speaking about our relations with Asia through the medium of economic and technical aid and co-operation. But this is of course only one facet of our present day association with and interest in the activities of our neighbour countries. Let me turn now to two countries with which Australia has particularly close associations. The separation of Malaysia and Singapore has not led to any reduction in Australia’s continuing assistance in their joint resistance to Indonesian confrontation or in collective defence planning generally. Despite our disappointment over the separation, Australia has continued to enjoy a close relationship with both countries.

The act of separation did not, in itself, resolve all the practical and administrative questions that obviously arise when a federation is brought to an end. This has meant that there have been differences of opinion between Malaysia and Singapore on a number of matters, and other differences may continue to arise. But over and above such differences is a sober appreciation by both states of the problems that they share, and the dangers to which they are jointly exposed. For our part, and to the extent that it is appropriate, we shall continue to counsel the advantages of close institutional relationships between the two states in economics and defence. 1 repeat that we welcome the recognition by the British Government of the importance of retaining the Singapore and Malaysian military bases and the affirmation, in last month’s White Paper on defence, that Britain will continue to maintain substantial strength in the region.

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INDONESIA

In Indonesia the situation is in truth still so fluid that it would be neither prudent nor helpful for me to engage in comment or speculation about it. It has been noteworthy that most countries, like Australia, have recognised that this is a domestic crisis. We have been circumspect in our comments on it, as have most other countries. The notable exception has been the Communist regime in Peking which, under considerable suspicion of involvement in the abortive coup of last September, has been aggressively outspoken and partisan about the whole situation ever since. Peking has used all its considerable resources of propaganda in seeking to influence openly the course of internal political developments within Indonesia. We in this country, and other countries of Asia and Africa which are observing these events, should take careful note of the light thrown on the conduct and motivation of Peking’s external policies, including its readiness to interfere in the domestic policies of other governments.

Unfortunately, in Indonesia the past few months have also seen a continuing deterioration of the economic situation, with the erosion of capital assets, the running down of foreign exchange and accumulation of debts, problems of credit and stagnating production. There is, as I said in October last, a formidable task to be done in concentrating resources, both human and material, on domestic construction and development. The longer this is postponed, the harder the task will be.

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INDIA AND PAKISTAN

Let me turn for a few moments to India and Pakistan - two fellow members of the Commonwealth whose friendship we value highly and whose relations deeply concern Australia. The Tashkent Agreement of I ott January, concluded between President Ayub of Pakistan and the late Prime Minister of India, Mr. Lal Bahadur Shastri, has been followed by the withdrawal of forces, as agreed, by the scheduled date of 25th February, and by a further agreement to reduce forces along the ceasefire line in Kashmir to levels decided in 1949. These measures contribute significantly to the reduction of tension in the sub-continent and offer hope of improvement in relations between India and Pakistan, which is essential if the sub-continent is to tackle successfully its great social and economic problems and also its external security problems. The statesmanship and wisdom of President Ayub and the late Mr. Shastri in reaching this Agreement receive our fullest commendation and support. We also welcome the fact that the new Indian Government of Mrs. Indira Gandhi has made clear its strong desire to improve relations with

Pakistan and to secure lasting peace on the sub-continent.

I should like to make one observation on the side with regard to the Tashkent Agreement. The Austalian Government acknowledges the responsible and constructive role played by the Soviet Union in bringing the two countries together in Russian territory. The Soviet Government has recently shown some awareness of the dangers of unrest in the sub-continent, and of the opportunities that this offers to Communist China to meddle and to pursue its expansionist aims. It is perhaps too much to hope for any early extension of a helpful and responsible Soviet role to other parts of Asia and elsewhere in the world. Unfortunately, differences between the Soviet and Western objectives are still acute. But in the long term we hope that some kind of broad common purpose in keeping the peace of the world will emerge.

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AFRICA

Of all the regions of the world it is the African continent that has suffered most from feverish restlessness over the past few months. This has been marked not only by the increasingly acute crisis over Rhodesia but by violent developments in several of the newly independent countries. In Africa more than thirty countries have become independent in the last decade, and have thereby assumed sole responsibility for their great and diverse political and social problems. Given these problems and given the magnitude of these problems and the different stages of development within the region, it was not to be expected that the early years of independence of the new African states would pass without setbacks. Each of these countries with limited resources has to find its own way in its own time, and should be allowed by others to do so. It is also very desirable that the African countries should be allowed, without interference from abroad, to develop their relationships with one another, and we shall do all we can to assist this process within the limits of our capacity.

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RHODESIA

This is the spirit in which the Australian Government has approached the crisis over Rhodesia, where the attempts to promote peaceful and unimpeded progress towards majority rule were interrupted by the unilateral declaration of independence. Australia, in common with the rest of the Commonwealth and virtually the whole of the international community, refused to recognise the regime of Mr. Smith and has cooperated with Britain in the application of economic and financial measures designed to secure a peaceful return to constitutional government. The effect of these measures, we believe, is beginning to be felt and the Government has seen no need to deviate from its view that what is needed in this situation is not the use of force but firm and patient support of the British Government as it seeks to carry out its responsibilities.

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RANGE OF AUSTRALIAN DIPLOMATIC ACTIVITY

In conclusion, I want to say a few words about the continuing activities of my own Department in its constructive efforts to strengthen our own position in the world, to understand external problems more clearly and to contribute to their solution more helpfully. Australian diplomatic work - I am sure that many members who have travelled have observed this - is growing both in range and in intensity. After nearly two years’ experience with the portfolio, I am personally greatly heartened at the repeated signs I have found in all parts of the world that in most of the 40 capitals in which Australia is represented we have established ourselves in truth and regard, and that we do have access to places of influence because we, or those who represent us, have earned the confidence of others. I believe from my observations that we Australians are thought of as a reliable people and I hope that nations who are undergoing trial are also thinking of us as a nation that is trying to understand and to help and to respect the rights of others.

We have also entered very largely into the diplomatic traffic of the world, both in the free capitals to which we are most closely linked - London, Washington and the international capital at the United Nations - and also in other capitals at which we are represented. Canberra itself, with our positive encouragement, is being visited to an increasing extent by statesmen of other lands and we have profited by the visits we have received over the past year by the

Vice-President of the United States, the Ministers of Defence of Britain and New Zealand, and other persons in high office from Britain, the United States, India, Taiwan, Japan, Malaysia, the Federal Republic of Germany, and other countries - all coming to Canberra in the course of interchange of communications between governments. The President of the Malagasy Republic was the first head of state from Africa to visit Australia. Last month the Prime Minister of Thailand, accompanied by his Foreign Minister and Minister of National Development, was here.

Then, in the reverse direction, Australian Ministers and members of Parliament have themselves travelled more frequently, particularly in Asia. Completing the process, our own ambassadors have been called frequently into consultation, both in special regional meetings under my chairmanship and by returning individually to Canberra. Personal contact has been made between myself and the Foreign Ministers of nearly all the countries with which we have relationships. I think there are only one or two out of the 40 whom I have not met.

Before passing on, I should like to express publicly - I hope all members would join me in this, particularly members who have travelled - the appreciation of the Government and, can I say, of members of the Parliament, for the many kindnesses received from our Asian neighbours. Asia is a land of courtesy. I and my colleagues and our ambassadors have appreciated greatly the consideration shown to us at all times. We have appreciated even more as a mark of growing friendship the frankness and the clearness with which the statesmen of Asia have been ready to discuss with us matters of common concern. As my own friendship and regard for them has grown, I trust their friendship and regard for us has also grown.

I think this diplomatic activity is of great importance to us. I should like to pay a tribute to those representatives of Australia who bear the brunt of carrying on Australia’s diplomatic activity, sometimes in very difficult circumstances. A nation of our size is not heard by speaking loudly, it is not heard by speaking all the time. We are listened to and we have influence if others believe that we talk sense, that we talk in good faith and that we back up our wor:,s with deeds. We are trying to establish those conditions in our diplomatic service and I am encouraged to believe that we are succeeding.

I present the following paper -

Foreign Affairs- Ministerial Statement, 10th March 1966- and move -

That the House lake note of the paper.

Debate (on motion by Mr. Allan Fraser) adjourned.

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AUSTRALIAN CAPITAL TERRITORY REPRESENTATION BILL 1966

Second Reading

Debate resumed from 9th March (vide page 72), on motion by Mr. Anthony -

That the Bill be now read a second time.

Mr J R Fraser:
ALP

– The Opposition welcomes this Bill, which proposes to repeal section 6 of the Australian Capital Territory Representation Act and, by that excision, to remove all restrictions on the voting rights of the member for the Australian Capital Territory. Personally, I welcome the measure because it is something that I have sought practically throughout the whole of the 15 years that I have represented the Australian Capital Territory in this place. The Bill provdes that it shall become effective after the next general election, that is to say, the member for the Australian Capital Territory in the 26th Parliament will be a member with full voting rights. There will be no distinction in voting rights as between the member for the Australian Capital Territory and any other member of that Parliament, with the then exception only of the member for the Northern Territory, as the Government has not yet moved to amend the Representation Act for that Territory.

At the outset I express the hope that with the authority, support and indulgence of the people of the Australian Capital Territory I shall be the first member for this Territory to exercise full voting rights. That, of course, remains to be seen; it is a matter to be decided at the polling booth.

The Opposition welcomes this measure because it achieves what the Opposition has sought to achieve on several occasions in this House. The first occasion was in 1959. The Government then was introducing some minor amendments to the Australian Capital Territory Representation Act. I think at that time - to the initial embarrassment of “ Hansard “ but quite correctly - 1 referred to them as piddling little amendments, and 1 sought to achieve a major reform by moving that all restrictions on the voting rights of the member should be removed from the Act. That amendment was quite thoroughly debated and was then voted upon and, of course, defeated by the Government numbers. Then in 1962 the Opposition itself introduced a bill which would have had exactly the effect of the present measure, that is to remove all restrictions on the voting rights of the member for the Australian Capital Territory. The Government permitted that, bill to go to the second reading stage and then allowed it to remain on the notice paper until the 24th Parliament was prorogued, when the item disappeared.

In introducing this measure the Minister for the Interior (Mr. Anthony) said -

Over the years there have been many requests that the member for the Australian Capital Territory be given full voting rights, but the Government has held firmly to the principle that this could be considered only when the enrolment for the Territory approached the average enrolment of the electoral divisions.

I admit at once that the questions of numbers has always formed the main basis of the Government’s objection to the amendment of the Act to remove what I have always regarded not as an insult to me but as an insult to the people of the Australian Capital Territory in their being refused representation in this House by a member with full voting powers. But while it may be true that the question of numbers has always formed the basis of the Government’s main argument, the Minister’s predecessor in the position of Minister for the Interior, and indeed the former Prime Minister, Sir Robert Menzies, found some other quite strange reasons for refusing to grant this reform. I refer to an answer given to me by the former Prime Minister in February 1959 when I suggested that the Government should take action to amend the Australian Capital Territory Representation Act. The Prime Minister showed solicitous concern for my welfare, or perhaps a solicitous concern for the people of the Australian Capital Territory, for in his reply he said -

I do not know whether the honorable member really wants to have a full vote for the Australian

Capital Territory. It seems it may expose his holding of the seat to some danger, but that is for him to determine.

Well, if he held that view the Prime Minister protected my interests by refusing to agree to the amendment I sought. I gather that the present Prime Minister (Mr. Harold Holt) has made a similar suggestion, perhaps not with solicitude but rather with glee, that if the seat is made a full voting seat the present incumbent may not be able to hold it. That, of course, is something for. the future and something for the people of the Australian Capital Territory to decide. Back in April 1959, when the former Minister for the Interior, now the Minister for Shipping and Transport (Mr. Freeth), was moving some minor amendment to this Australian Capital Territory Representation Act, he gave some reasons why the Government could not agree to grant full voting rights. He said -

If it is merely a question of numbers, then the member for the Australian Capital Territory is clearly not entitled to full voting rights at present.

This was in 1959, when the enrolment was much less than it is at present. The Minister went on to say -

There are, of course, other difficulties in the way. The Australian Capital Territory has been created by the Sates as part of the machinery of federation. As a centre of administration it is largely financed by the contributions of taxpayers all over Australia. Whether it is justifiable to have the fate of a government responsible for the national policy possibly at the mercy of the representative largely elected by the civil servants at the heart of the administrative machine is at least open to argument.

I want to assure the present honorable member for the Australian Capital Territory that I do not express that view merely because, at the present time, he happens to represent a political party in opposition to the present government. A glance at the party numbers in this House should be a convincing reassurance to him on that score. Indeed - and I do not know whether the honorable member can take this as a compliment or otherwise - at has been represented to me quite strongly that while the member for the Australian Capital Territory has no vote in the House and therefore does not directly influence the fate of a government, residents in the Australian Capital Territory make the best of both worlds by electing a representative of the opposite political persuasion to that of the government in office.

At least, having used that quite specious argument, the Minister had the grace to say -

I concede that at times that kind of view demands some pretty accurate political forecasting. I mention that argument only to emphasis that this government is not actuated by party politics or personali ties in its present views. Another argument sometimes used to justify the withholding of full voting rights is the extent of which the Commonwealth Government is obliged, as part of its function of developing a national capital, to spend on the provision of amenities here large sums of money that are quite out of proportion to the taxation contributed by the electors resident in the Australian Capital Territory. I do not rely on that as a very powerful argument except to say that there is no ground for supposing, on the present expenditures on Canberra, that the citizens are not receiving a very fair share of government consideration.

I mention this to show that the Government has not always relied entirely on the question of numbers - that it has not always based its opposition to this electoral reform on the numbers enrolled in this electorate. In that same debate, in reply to my amendment seeking the removal of all restrictions on the voting rights of the member, the then Minister for the Interior said -

To my mind it is entirely reasonable that we should look to an approximate equality in the numerical size of electorates. I will deal with that point. It was also suggested that because I had introduced into the discussion the question of according a vote to the representative of a civil service community my argument fell to the ground on the numerical question. At no time in the debate have I said that when the numbers in the Australian Capital Territory came up to the average number in any electorate this Government would automatically grant full voting rights to the member of the Australian Capital Territory. I introduced this as another consideration which must be taken into account. t believe that it is quite an important point. It was quite rightly said that it was undesirable to deprive a civil servant living in Melbourne, Perth, or Sydney of a vote. Where civil servants are spread as a sort of leaven amongst all the other electorates, there can never be said to be a true civil service vote as such, because it is not readily identifiable.

He went on -

It becomes rather interesting to find the civil service charged with the duty of being nonpartisan in the advice it gives to governments, charged with being impartial in its approach to political problems, and yet having possibly a decided leaning towards one political party or another, where that civil service vote is identifiable.

That is the only distinction in principle between the civil servants in Melbourne, Sydney or somewhere else in Australia and the conglomeration of civil servants in Canberra. I am quoting the words of the former Minister for the Interior, now Minister for Shipping and Transport. He went on to say -

Is it desirable that the civil service vote, as such, should be identified with a political party when, in point of fact, the duty of the civil service is to give impartial advice to the government of the day? It is quite true that there is a distinction which can be drawn. A civil servant may hold definite political views and yet, in the line of duty, still give impartial advice to those carrying out the government. I believe many do, but in the public mind I think confusion would be created and the doubt would be there.

I have said on previous occasions - and I say again that I think that was a very poor argument for the Minister to use at that time. I hope and believe that the present Minister will not use that form of argument, and indeed the fact that he has introduced this Bill and has, I believe, persuaded his Prime Minister and Cabinet to agree to its introduction, reveals that he will not adopt that line of thinking. But it needs to be recorded that that was the argument used by a previous Minister for the Interior in refusing to grant full voting rights to the member for the Australian Capital Territory, thus denying lull representation in the Parliament to the citizens of the Australian Capital Territory. As I have said, the Government requires members of the civil service to hold political views. In fact, it compels them to express political views in compelling them to vote. The compulsion to vote quite clearly pre-supposes that the civil servant who goes to the polls must hold and must express political views when he casts his vote for the candidate of one party or another. So I believe that the argument put forward by the former Minister was completely without substance, in that it denied to a whole community the right of full representation in the Parliament.

We have had recent experience in this Parliament of the attitude of this Government to a civil servant who chose the express certain political opinions and to hold to a certain political belief. I refer to the recently elected member for Dawson (Dr. Patterson), who was a very senior public servant when he announced his intention to contest that seat as the candidate of the Australian Labour Party. What the former Prime Minister, Sir Robert Menzies, had to say on that occasion is fresh within the memory of many members of this House. I would say that the people of this Territory particularly and the people of Australia as a whole should remember these things, because those are the views expressed by leading members of the Government parties on their attitude towards members of the Public Service. It is perhaps worthwhile just to glance back on the history of this matter, because it is quite clear that members of the present Government parties have not always based their argument against full voting rights for the member for the Australian Capital Territory on the question of numbers.

The Australian Capital Territory Representation Act was passed through this Parliament by the Chifley Labour Government in 1948. That was the Act designed to give the first representation in the Parliament to the people of the Australian Capital Territory and it included the provision that the member for the Australian Capital Territory might vote only on a motion to disallow an ordinance. In this the Government was following the pattern of legislation already in force in the Northern Territory to grant representation there, lt was held - and I think quite rightly - that at that time, when the electorate numbered between 1 1 ,000 and 12,000 voters, you could not have given a member representing that number representation equal to that of members representing electorates then averaging 50,000 or 60,000 electors. But the non-Labour parties of that day assailed the Government on its provision. Of course it is the duty of an Opposition to oppose, but they assailed the Government for not granting full voting rights to the member for the Australian Capital Territory. They protested that the Government should have given him full voting rights even though the enrolment was then only 11,000 or 12,000.

Mr Daly:

– They were very honest in opposition.

Mr J R Fraser:
ALP

– They were kept honest in opposition. The trouble was that they were not kept in opposition long enough. They might have been more honest today if they had been. On 1 1 th November 1948 a former member for Henty, Mr. Jo Gullett, who later resigned from politics - I think he got heartily fed up with the conditions in the party to which he belonged, he gave politics away and became a farmer in the Australian Capital Territory and is now our Ambassador in Greece - speaking to the debate on the original Australian Capital Territory Representation Act, said -

It is just as well to remind ourselves that the people of Canberra will still be classed with lunatics, criminals, children, aborigines and, of course, aliens; as people without an effective voice in the national affairs of this country, and people without a say in their own process of self government.

That was the view expressed by Jo Gullett, who was a member of the Opposition in 1948 and who, of course, became Government Whip in the Menzies Government. But the description he gave, apart from the minor amendment now made to grant voting rights to Aborigines, could still be held to reflect the opinion of the present Government so far as residents of the Northern Territory are concerned. The amendment now proposed will, as from the commencement of the next Parliament, remove the people of the Australian Capital Territory from that classification. But from now until, say, February of next year, they could be classed with lunatics, criminals, children and, of course, aliens. After February of next year that stigma will be removed from them, but it will remain with those who live in the Northern Territory and who elect a member to this Parliament.

Mr Daly:

– Judged on their representatives here they are highly intelligent voters.

Mr J R Fraser:
ALP

– I thank the honorable member for Grayndler very kindly on my behalf and on behalf of the honorable member for the Northern Territory (Mr. Nelson). It is perhaps worth recalling criticism expressed by a quite distinguished member of the Menzies Government, which then, of course, was in opposition. I am now speaking of the debate in 1948. The honorable member for Wentworth, Sir Eric Harrison, who became Vice-President of the Executive Council and later High Commissioner for Australia in the United Kingdom, also criticised the provision of the Chifley Act of 1948 which denied full voting rights and said that the then Opposition parties, when they came into power, might find it necessary to amend that provision. The debates to which I have referred show how opinion has changed and how Government members who in those days felt that the member for the Australian Capital Territory should have full voting rights, have voted and spoken against a bill on the same subject.

I do not propose to use anything like my full time in this debate, though I wish to place certain things on record. I think lt is worth reminding the House that although this seat was created in 1948 when there was an enrolment here of only about 10,000, at the first election in 1949 when the late Dr. Nott was elected to this House as the first member for the Australian Capital Territory the enrolment was only about 11,800, as the Minister said yesterday. At the 1951 election when I was elected it was 12,774. By 1954 it had increased to just short of 15,000 and in 1955 it was 16,181. In 1958 the enrolment had crept up only to 20,563. It was not until the election in 1961 that the first substantial increase took place. In the three years between 1958 and 1961, the enrolment jumped from 20,563 to 28,698. In the following year it increased to 29,941. At the election in 1963, the enrolment was over 36,000. The present figure is 43,726.

This is still considerably short of the average of electoral enrolments in the 122 seats that return members with full voting rights in this House. In February, the average stood at 49,236. Although enrolment in the Australian Capital Territory is still some thousands short of the Australian average, it is worth putting on record again the fact that the present enrolment of 43,726 in this electorate is greater than the figure in 50 of the electorates represented in this House by members with full voting rights. Of those seats, 21 are in New South Wales, 14 in Victoria, 4 in Tasmania, 6 in Queensland, 4 in Western Australia and 1 in South Australia. So there are substantial reasons for the introduction of the Bill that the Government has now brought in.

Just for the record, Mr. Deputy Speaker, I point out that of the 50 electorates with an enrolment exceeded by that in the Australian Capital Territory, no fewer than 9 are represented by Ministers. It may have been of great help to our argument that the enrolment in the Territory is now some 3.000 greater than that in the seat of Higgins, which is held by the Prime Minister, and about 3,000 greater than that in Lowe, the seat held by the present Treasurer (Mr. McMahon).

Mr Daly:

– It is about 11,000 above the enrolment in my electorate.

Mr. J. R. FRASER__ That is so. The enrolment in the Australian Capital Territory exceeds that in the electorate of New

England, which is held by the Minister for Social Services (Mr. Sinclair), that in the Paterson electorate, which is represented by the Minister for Defence (Mr. Fairhall), that in Richmond, which is represented by the Minister for the Interior, and that in Curtin, which is held by the Minister for External Affairs (Mr. Hasluck), who has just held the House enthralled with a discourse on external affairs. The enrolment in this Territory exceeds that in the electorate of Perth, which is held by the Minister for the Navy (Mr. Chaney), and that in Fawkner, which is represented by the Minister for Air (Mr. Howson). I repeat that the enrolment in the Australian Capital Territory exceeds that in the electorates represented in this House by nine Ministers of the Crown.

Mr Mackinnon:

– It exceeds also the enrolment in the electorate represented by the Leader of the Opposition (Mr. Calwell).

Mr J R Fraser:
ALP

– The enrolment here exceeds not only the enrolment in the seat held by the Leader of the Opposition but also that in the electorate represented by the honorable member for Melbourne Ports (Mr. Crean). I suppose there is a fairly even balance between seats represented by Government supporters and those held by Opposition members among the electorates whose enrolment is exceeded by the figure for this Territory. The full tally of electorates with an enrolment currently lower than that in the Australian Capital Territory is already 50, and officers of the Commonwealth Electoral Office have indicated to me that the enrolment here is rapidly overtaking that in a number of other seats. So. by the time this measure becomes effective, the enrolment in the Territory may exceed that in 60 or more electorates. By that time the enrolment in this seat may well be greater than the enrolment in at least half the electorates represented in’ this House.

It is obvious that an electorate of this size should no longer be denied full voting representation in the Parliament and I commend the Government on having introduced this measure. It is a great pity that the Administration has not seen fit to introduce it with immediate effect, but I accept as a reasonable proposition the proclaiming of this amending measure on the day on which the Twenty-sixth Parliament assembles.

This means that when the people of the Territory go to the polls later this year they will know that they will be voting to elect as their representative in this Parliament a member who will have full voting rights at least equal to those of all other members of this House. I should like to stress one point Mr. Deputy Speaker, because some idle thoughts have been projected about this matter. The mere granting of full voting rights will not alter the actual parliamentary role of the member for the Australian Capital Territory, because this, after all, is a most unusual electorate. Any usual Commonwealth electorate on the mainland comprises an area represented in the State Parliament, on the average, by two members. I think that in Tasmania there are probably five State members to every Commonwealth division.

Mr Duthie:

– There are seven.

Mr J R Fraser:
ALP

– That is better still. In the average division on the mainland there are two State electorates. There are also a number of city, municipal or shire councils, as the case may be. But in the Australian Capital Territory, there is no government at the State level. There is no local council or Legislative Council. So the member for the Australian Capital Territory in any future Parliament, whoever he or she may be, under the existing system will have to represent the electorate not only at the Commonwealth level but also at the State and local council level. Further than that, because the Commonwealth is here landlord to everybody - because it owns either the land or both the land and the house built on it - a matter that normally is one between landlord and tenant here becomes a matter between the citizen and the Commonwealth. So the member for the Australian Capital Territory must act in that field as well. In addition, because the Commonwealth is, either directly through the Public Service or through other channels, employer to so many, what would normally be matters between employee and employer here become matters between the citizen and the Commonwealth. So the problems that arise in these fields also land on the table of the member who represents the Territory in this House.

Mr Stewart:

– What does he do in his spare time?

Mr J R Fraser:
ALP

– I can assure you, Sir, that he does not play squash. I mention these matters, not necessarily to scare off any aspirants, but just to point out to them that if they come here with any hifalutin ideas that they will be able to study and speak on matters of national and international import, under present conditions they will have to think again, because their time will be so fully occupied with representation of the kind that 1 have mentioned as to make this impossible, just as it is impossible for me to become familiar with much of the legislation that comes before this House or. indeed, to become an expert in any particular field of legislation. This is one of the facts of life in this electorate. The job of representing this seat is a full time one and it has to be done at many levels.

Mr Daly:

– Is it rewarding?

Mr J R Fraser:
ALP

– It is perhaps rewarding, but not sufficiently so. Under present conditions, as the member for the Australian Capital Territory is the only full time paid representative that the people of this Territory have, his time is fully occupied with the thousand and one matters which his constituents bring to him and which in other electorates would be dealt with by members of State Parliaments and of city, municipal or shire councils. As I have said, this is one of the facts of life in this electorate and I put it on record for the benefit of those who believe that the member for the Australian Capital Territory, now that he is to have full voting rights in this House, will be able to speak on all the great topics that come before this Parliament and that he will be able to make himself an expert on external affairs, repatriation benefits, social services and the like. He has, of course, to represent his electors on these matters. He has to represent them in all the fields of federal legislation, but in addition he has to represent them in fields in which normally they would be represented by members of a State Parliament and by a local council. That position will oe maintained until the Government sees the wisdom of creating within this Territory some form of local self government.

This is one of the great needs of this Territory, and I believe that within the electorate the opinion is growing in strength that this reform should be undertaken and that the people of the Territory should be given the right to govern themselves in their day to day affairs. Not only should they be given this right; they should also no longer be allowed to escape the responsibility of governing themselves.

The Minister for the Interior who introduced the Bill has also committed himself on this matter of self government for the Australian Capital Territory. He has inquiries in hand to overcome the problems created by the division that must be made between what is properly national expenditure in the Territory and what can properly be said to be local expenditure to be borne by the residents of the Australian Capital Territory. But until this Territory is given some form of local self government, either through a Legislative Council or a Territory Council of some kind, the member for the A.C.T. in this Parliament must act for his constituents - and the population of this place now approaches 100,000. He must act for them in all the three categories I have described. In fact, because the member for the A.C.T. must bring their representations to this Parliament, this National Parliament itself is required to spend portion of its time dealing with matters which should more properly be dealt with by a Legislative Council or a local council.

  1. said once of a previous Minister for the Interior that I wished the previous Minister for Territories would bite him, because that Minister for Territories had established a Legislative Council for the Northern Territory and a Town Council for Darwin while the Minister for the Interior of that time was still refusing to introduce those reforms into the A.C.T. I hope the present Minister for the Interior will persuade the Government of the wisdom of taking this step as early as possible.

In introducing the measure, the Minister made some reference to the Northern Territory and 1 have done so also in passing. I hope that the Minister will help to persuade the Government to remove all restrictions on the voting rights of the member for the Northern Territory. That is one act of justice to which we on the Opposition side as a party are committed and I hope that the Parliament shortly will have the opportunity to amend the Northern Territory Representation Act. Perhaps the present incumbent will thus be persuaded to change his mind and instead of resigning remain the member of the Northern Territory, the electorate which he has served so well for many years.

I commend the Bill which will give delayed justice to the people of the Australian Capital Territory. I know that the people of this Territory will exercise their powers at the polls with wisdom and make a clear assessment of the policies of the opposing parties and the candidates who stand for election. I repeat the hope that having campaigned so long for this reform to grant full voting rights to the A.C.T. I shall be the member who will first exercise full voting rights for the Territory in this Parliament.

Mr NELSON:
Northern Territory

– I rise to speak in this debate for two reasons: First, to congratulate the people of the Australian Capital Territory on attaining their citizenship rights and becoming equal with all other citizens of Australia except those of the Northern Territory in the political and citizenship fields. Secondly, I would remiss in my duty as the representative of the Northern Territory if I did not at the same time register a protest at the Government’s failure to extend this justice to the people of the Northern Territory. The fact is, of course, that the Government is still tied to the principle that the member for the Northern Territory - like the member for the Australian Capital Territory in the past - has to represent a community with a numerical strength approximating the average Australian electorate. As the honorable member for the A.C.T. has pointed out, this has not always been so. As far back as the beginning of Federation in Australia, the founding fathers did not accept this proposition when they framed the Constitution. At that time, the size of the Tasmanian electorates was fixed at a rauch lower electoral figure than applied to other parts of the Commonwealth because it was realised that the Tasmanian electorates had special features which deserved special consideration and treatment. I, with the honorable member for the A.C.T., have always felt that not only the people of the A.C.T. but also the people of the Northern Territory were entitled to this special treatment. We believe that citizenship is a birthright and should not be governed by the necessity to belong to a community of 50,000, 60,000 or 70,000. We in the Northern Territory, like the residents of the Australian Capital Territory, are obliged to observe the requirements and obligations of citizenship as is anybody else in Australia, but we have not had granted to us the privileges of citizenship.

The Government must be thinking of altering to some extent its views on the numerical principle on which it has based its considerations in the past because it has been announced that next year, after the referendum to break the nexus between the House of Representatives and the Senate, the case of the Northern Territory will be considered again. This seems to me to be an indication that consideration might be given now to the special needs of this community. We could thus be brought into line with all the other people of Australia. We would not have in the Northern Territory an isolated population away out in the frontiers of Australia who feel an injustice at having to be classed, as the former member for Henty classed us at one time, as belonging to the categories spelt out by the honorable member for the A.C.T. I rise to congratulate the people of the A.C.T. and to register a protest at the failure of the Government to act at this time to extend justice to the Northern Territory. It would have been quite simple to have done this now.

If the Minister for the Interior (Mr. Anthony) replies, I should like to know what the Government has in mind regarding representation in the Senate for both the Northern Territory and the Australian Capital Territory. The Constitution provides that Senate representation can be granted on certain conditions to an Australian Territory. The A.C.T. will have full voting rights in the House of Representatives. So far no mention has been made of the type of representation, if any, which is contemplated in respect of the Senate. I should like to know whether the Government has any views on this matter, because if the Australian Capital Territory receives some recognition of this type then in time to come the Northern Territory also will receive similar consideration. Again I congratulate the people of the Australian Capital Territory and wish them every success with their rights and privileges. I hope and trust that the work that has been done by the honorable member for the Australian Capital Territory will be rewarded at and after the next Federal election.

Mr DALY:
Grayndler

.- I wish to make just a few remarks on the measure under consideration. First, I congratulate the honorable member .or the Australian Capital Territory (Mr. J. R. Fraser) on this important occasion. No member of this Parliament has pressed more for full voting rights for the representative of the people of the Australian Capital Territory than he has. The people of this Territory should be grateful for the fact that the honorable member has consistently pushed this Government, which is so very reluctant to take any forward steps, to give them what is their right - representation in this place by a member with full voting rights. The honorable member must be very proud that the Government has at last answered his pleas for full representation for his constituents. 1 am sure that he had doubts that the Government would do so. I cannot help thinking that the people o; the Australian Capital Territory must be pleased to know that they are no longer in the category mentioned by our present Ambassador to Greece, who said -

  1. . it is just as well to remind ourselves that the people of Canberra will still be classed with lunatics, criminals, children, Aborigines and, of course, aliens, as people without an effective voice in the national affairs of this country . . .

Tonight we celebrate the great occasion when the people of the Territory are recognised as citizens in their own right, with an effective voice in the Parliament. The honorable member who now represents them is entitled to their unfailing support for the constant efforts that he has made to force a very backward and out-dated Government to grant them this democratic right.

At the present time about 47,000 people are on the electoral roll for the Australian Capital Territory. That is more people than are represented by almost 50 of the members in this place. The honorable member for the Northern Territory (Mr. Nelson) is still without a vote in this place except on some issues. That is to the eternal discredit of this Government. The electorate represented by the member for the Northern Territory covers a huge area.

The Government has been speaking of northern development, yet the member representing the Northern Territory, one of the most able members of the Parliament, cannot, by his vote here, further the interests of the people of that great district.

In the Northern Territory there are 17,000 names on the electoral roll. Australian Country Party supporters have said that electorates covering great areas should not be required to have as many people on the electoral rolls as there are on the electoral rolls of inner city districts. They have said it is right that country electorates should have 20,000 voters and that a city electorate such as mine should have 60,000. They have said that members representing huge areas have greater burdens imposed upon them. We have heard the Minister for the Interior (Mr. Anthony), who is a member of the Country Party, advocating numerically smaller electorates for members of his Party, at the expense of city electorates. This is Country Party policy. Yet the Minister for the Interior, who is responsible for redistribution of electoral boundaries, said last night in his second reading speech on this Bill that not enough people were on the roll in the Northern Territory to entitle their representative in this place to a full vote. He said that the Northern Territory has not as many electors as any other electorate within the Commonwealth. I can see no justification for not giving the 17,000 people on the electoral roll of the Northern Territory representation by a member with full voting rights in the Parliament.

Far be it from me to bring politics into a debate on a national issue like this, but let me ask the Minister: If the member for the Northern Territory were a member of the Country Party, would he have full voting rights in the Parliament today? I wonder whether the Government would take a different line if he were not a member of the Australian Labour Party. If the Minister really believes in numerically smaller electorates for country districts, no man in this place has a greater claim to support from the Minister and his Party than the honorable member for the Northern Territory in his claim for full voting rights in this Parliament. I wonder why the Government, which says that it desires to do all things that are just and proper, did not give full representation to the people of the A.C.T. after the 1961 general election, when the Government had a majority of only one in this place. Evidently the Government’s ideas on these matters change, depending upon who holds a seat and what the numbers are in the Parliament. Full voting rights are now to be given to the member for the A.C.T. I hope that it will not be another 10 years before the member for the Northern Territory is given the same right in this place.

I suggest to the Minister that he tell us why he does not follow the policy of his Party and give a full vote to the member for the Northern Territory. Honorable members will recall that when we were debating a bill relating to the wool industry last year we were told that a grower with only 10 bales of wool would have a vote at a referendum, and that the principle of one vote one value was to be followed. That principle was not in line with Country Party policy. But now the Minister has a chance to come right into line with Country Party policy by giving the member for the Northern Territory a full voting right in this House. That would give justice to the people of the Territory. If the Minister will not accept that suggestion, I would recommend that the people of the Northern Territory continue to vote Labour, because only in that way will they get a member who will do for them what the member for the A.C.T. has been able to do for the people of that Territory, that is, force the Government to give a real voice in the Parliament to the man who represents them.

I support the request made by the honorable member for the Northern Territory. I extend my personal congratulations to my colleague from the A.C.T., as I know do all of those who believe in democracy, on what is a magnificent occasion for him and also for the people of the A.C.T. This is an achievement that deserves the commendation of us all.

Mr ANTHONY:
Minister for the Interior · Richmond · CP

– in reply - I listened tonight with great interest to the honorable member for the Australian Capital Territory (Mr. J. R. Fraser). I was not quite wre whether his remarks were a preview of his policy speech for the forthcoming election. No doubt the member for the Territory, whoever he may be in the future, will have to go to the people of Canberra with a very much broader policy than has been the case in the past. The honorable member tonight spoke for some considerable time. He seemed almost to be trying to say that we should not give a vote to the member for the Australian Capital Territory. He mentioned arguments that the Government had used over the years but did not mention the criterion which the Government has stuck to rigidly - that is, that this matter would not be considered until the electoral population of the Territory approximated the electoral quotas of the States. That has been the Government’s view.

The stage was reached when the Government again had to look at this question. It considered it and decided that the time had arrived when the people of the Australian Capital Territory should be given electoral rights which would enable the member for the Territory to have full voting rights in the Parliament. After listening to the honorable member for the A.C.T. speak of his difficulties in representing this area, I will pay him due credit. He does have heavy electoral commitments in that he has to do work normally performed in a municipal or State sphere. But he almost gave me the impression that the member for the Australian Capital Territory, whoever he may be, would be so busy on these matters that he would not be able to cast an informed and intelligent vote on national and international affairs. I hope the honorable member did not really intend that I should interpret his remarks in that way. However, he would almost allow me to think that perhaps we did the wrong thing in giving the honorable member for the Australian Capital Territory full voting rights, because he is so preoccupied with his own local affairs.

I turn now to answer a question asked by the honorable member for the Northern Territory (Mr. Nelson). The honorable member asked what form of representation the Government is considering should be given to the Northern Territory. I reiterate what I said in my second reading speech - that the Government will re-examine the question of full voting rights for the honorable member for the Northern Territory only after the referendum has taken place next year. It is absolutely impossible for me to inform the House of what form of representation will be chosen. The honorable member for the Northern Territory asked whether it would be representation both in this chamber and in the Senate. Such questions will have to be studied. It is a complex problem, and the decision will be taken only after the Government has given a great deal of consideration both to the principle of electoral quotas and to the possibility of representation both in the House of Representatives and in the Senate.

The honorable member for Grayndler (Mr. Daly) apparently finds it impossible to keep out of any debate relating to electoral matters. He enjoyed the opportunity tonight to air his hatred of the Australian Country Party. However, it was delightful to hear him tonight pose as the great crusader supporting the principle that some allowance should be made for area. He used the words “huge areas”. He also referred to huge distances to be covered and difficulties experienced by honorable members in trying to represent large electorates. This was sweet music such as I have never heard come before from the honorable member for Grayndler. We remember the occasion last year when he fought hard for the principle that no variation should occur in the sizes of electorates and, if there was to be any variation; it should be a maximum of only 10 per cent. The honorable member’s words tonight have gone down on the record and I- am sure that we will be able to quote them for many years to come to illustrate his opinion about the difficulties of communication in electorates covering large areas.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Anthony) read a third time.

page 191

QUESTION

COMMONWEALTH PARLIAMENTARY ASSOCIATION

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

– I present the following paper -

Report of the Delegation from the Commonwealth of Australia Branch of the Commonwealth Parliamentary Association to the Eleventh Commonwealth Parliamentary Conference held in Wellington, New Zealand, in NovemberDecember 1965. and move -

That the House take note of the paper.

The report which I have just presented relates to the visit of the delegation from the Commonwealth of Australia Branch of the Commonwealth Parliamentary Association to the Eleventh Commonwealth Parliamentary Conference which was held in Wellington, New Zealand, during November and December of last year. The delegation comprised Senator Marriott and Senator Poke and the honorable members for Corangamite (Mr. Mackinnon), KingsfordSmith (Mr. Curtin) and Scullin (Mr. Peters), and myself as leader. I am sure I speak sincerely on behalf of all members of the delegation when I state that each of us was highly honoured to represent the Parliament at this quite notable conference. Over 70 branches of the C.P.A. were represented at the Conference by more than 130 delegates and observers and this in itself provided an exceptional opportunity for parliamentarians from all parts of the Commonwealth to make contacts, form friendships and generally to get to know each other better.

The Conference met at a time of considerable tension within the field of Commonwealth relations as, only a short time before, the Rhodesian Government had issued its unilateral declaration of independence. As delegates gathered for the Conference, many African representatives publicly demanded strong action to suppress the rebel Government. It was clear that the action of the Smith Government was condemned on all sides and, by a unanimous decision, the Rhodesian Branch was expelled from the Association. It was also decided that the whole of the first day of the Conference should be devoted to the question of Rhodesia, although this was not provided for in the provisional agenda for the Conference. In a debate in which many forthright speeches were made, strong demands were made, particularly by African delegates, for the use of force, but these were with equal emphasis resisted by United Kingdom and other delegates.

The Conference, on this occasion, was extended to cover twelve sessions which were held on seven days and its discussions ranged over an agenda of subjects of vital interest to all Commonwealth countries. The report which I have just presented deals broadly with the Conference discussions. The full text of the speeches delivered should be available shortly from the General Council Office of the Association and I would commend its persual to honorable members.

The report of the delegation also deals with the meetings of the General Council and the General Meeting of the Association at which two important matters were submitted on behalf of our own Branch. Honorable members will recall that, at the 1964 meetings in Kingston, Jamaica, preliminary consideration was given to proposals submitted by our delegation for an increased scale of parliamentary visits. These proposals were again submitted at the Wellington meetings and were, on resolution, agreed to in principle and referred to the Secretary-General for development in consultation with all branches. The Commonwealth Parliamentary Association has a very special role to play in the preservation and development of relations between Commonwealth countries and there is, I think, a growing realisation of the importance of inter-parliamentary visits in the furtherance of this role. The acceptance of the branch proposals was, therefore, gratifying and we confidently look forward to their successful development in the future.

The second major proposal put forward by the Branch related to the administrative functioning of the General Council. With the rapid increase in the number of main branches, the Council has become a most unwieldly body for management purposes. We have therefore proposed, in a preliminary way, the formation of a subcommittee of top level councillors to manage Association affairs between conferences. This suggestion from Australia was well received and its submission in positive form at the meetings this year could well be acceptable.

All honorable members appreciate, I am sure, the important role which the Association can play in maintaining the links which bind together the various nations of the Commonwealth. The Australian Branch has, I think, taken an active and constructive part in the activities of the Association, a continuance of which will do much to preserve the ties which bind us within the Commonwealth. I personally valued very greatly the opportunity of participating in the Conference in Wellington and of meeting the large number of interesting and diverse personalities who attended. New Zealand, the host Branch, spared no effort to make our stay in that wonderful country an enjoyable one, and to that Branch we express our sincere gratitude.

In conclusion, I should like to pay tribute to my colleagues in the delegation and also to Mr. Norman Parkes, who was its secretary. At all times my fellow delegates cooperated fully in the function of ably representing the Branch and participating in Conference discussions.

Mr MACKINNON:
Corangamite

– I should like to join with my leader, on this occasion the Minister for Primary Industry (Mr. Adermann), and other delegates at the conference from Australia in expressing a few thoughts about the actual conduct of the conference and some of the subject matter discussed. But I should like to preface my remarks by expressing my personal thanks - and I believe also those of the other delegates - to our leader on this occasion, the Minister for Primary Industry. I felt that we were an extremely happy party. I believe we did Australia credit, and while he could not say it himself, I feel we were extremely well led by the Minister for Primary Industry.

I think it would be quite out of place to omit some expression of deep gratitude to the host branch., the New Zealand Branch, of the Commonwealth Parliamentary Association, which was so ably assisted by the New Zealand Government in making arrangements for the care and welfare of the delegates, not only at the conference itself but also in the period prior to the conference when most extensive and interesting tours were arranged for the various del gations. I think the Minister for Primary Industry was a little conservative in his estimate of the numbers present. Actually I think there were about 150 altogether, with the various observers but, as the Minister said, this number had to be divided into seven different touring parties and tours were arranged which included quite extensive visits throughout both North and South Islands. We had an opportunity not only of partaking of the extraordinarily generous hospitality of the people of New Zealand but also of seeing many of their primary and secondary industries. Above all, we had the opportunity of enjoying the extraordinary attraction of the scenery of New Zealand. As I wrote in a recent letter to the Right Honorable Keith Holyoake, Prime Minister of New Zealand, if scenery was dollars and sterling credit, New Zealand would have no balance of payments problems. This is indeed a fact. New Zealand is one of the most lovely countries in the world. The delegates, especially those of us who were interested in primary industries, had the opportunity of seeing some of the most efficient farming taking place, particularly from the grazing angle, in the world.

I think it is worth recording that there has been some criticism of the idea that was adopted on this occasion of having preliminary tours before the actual conference was held. It was felt that perhaps a little too much time was devoted to the tours, thus taking time out of the lives of a number of busy men from all over the world. I would like to express my view. These tours not only had immense value in bringing to our own knowledge the problems of the host country but they also gave us a unique opportunity of meeting on a social level many delegates whom we would never have had the same opportunity of meeting but for the tours. We had the opportunity of meeting them in circumstances in which we could discuss informally the points of policy, the points of national differences and the points that might arise in the subsequent discussions that took place at the conference.

I think it is well to remember, too, that these discussions were on a completely informal basis and, because of this, one could rely on getting a reasonable expres sion of view from a number of delegates who, perhaps, in the open forum of conference, might have been talking to their Press, wherever it came from or wherever they came from. I feel that this opportunity of getting around and meeting these people prior to the conference itself had very great value in some ways - in enabling us to get to know each other better than in the actual period during which what was being said was being taken down and being published throughout the world.

You, Mr. Deputy Speaker, will realise the importance of this matter because it has been raised recently in connection with the Prime Ministers” Conference which normally takes place in London. Instead of preserving an atmosphere of privacy of discussion in camera, a number of the speeches made at the Prime Ministers’ Conference were blazoned throughout countries of the Commonwealth of Nations before the speeches had been made. If we are to have a logical approach to the solution of differences it is essential that we should have confidence that our conversations and our expressions of thought are not being publicised outside the actual meeting place. I firmly believe that the touring which took place before the formal conference had tremendous value. It gave us a chance to interchange ideas and afforded a unique opportunity of getting to know each other and each other’s problems on an unofficial level. This was extremely valuable.

The Minister mentioned the difficulties facing us when the conference started. It is reasonable to say that no previous conference of the Commonwealth Parliamentary Association assembled in a more difficult atmosphere or in more difficult circumstances. The situation was pregnant with possibilities of divergent racial and economic factors creating conditions that could lead to a clash between the various delegates, lt is true that due to the common sense of those conducting the conference, particularly the chairman, the Hon. Blair Tennant who has been a great leader in New Zealand for the Association, this conference proved a great success under extremely difficult conditions. I am sure the delegates who attended the coa*ference would agree with this.

The question of Rhodesia was considered. A number of the African countries in particular, supported by the delegates from other countries including India and Pakistan, recommended that the United Kingdom should use force against the Smith administration. We came down firmly in the belief that one does not create a war where no war exists, and we opposed the recommendation. We also had before us the burning question of India and Pakistan with Kashmir as the subject for discussion. One hour was allowed for debate between the delegates of those two countries with no other country joining in. On the face of it this was one difficult situation that could have affected the general atmosphere of the conference. Over and above ail else was the question of Vietnam. On the final day present with the observers at the conference was Senator Fullbright who, as some honorable members may know, has expressed strong views on the policy adopted by the United States in relation to Vietnam. I mention these matters to give other members of the Parliament some idea of the atmosphere in which the conference was held.

I should like to conclude by referring to the tremendous assistance given to us by our parliamentary staff. This is not the first occasion on which I have had the opportunity of being blessed by the extraordinary efficiency of the people who serve this Parliament, particularly when we are on tour. I express my own thanks to Mr. Parkes for the tremendous assistance he gave us. The conference was worth while. Conferences of this type bring out different points of view and if we can get sufficient points on which to agree we achieve some soft of mutual understanding. While obviously the atmosphere of this conference was fraught with possibilities of differences, the net result was in fact very rewarding for the Commonwealth Parliamentary Association. We should feel proud of what was achieved under the extraordinary difficulties facing us at the time.

Mr PETERS:
Scullin

– I join with my two fellow delegates to the conference who have just spoken in expressing my thanks to the New Zealand Government for the way it entertained delegates and for the ideal provisions it made for the holding of the conference. The trouble with the world today is that at the slightest pro vocation pieces of it fly one way or another, with consequent fragmentation of the nations and existing political entities. I do not believe that you make for the peace of the world or make the world a better place to live in by creating more and smaller political entities. For that reason, not merely should the Commonwealth of Nations be preserved but its members should endeavour to get closer together and to understand better the problems that face each of them.

There are people who, using the magic terms “ nationalism “ and “ independence “, seek to separate themselves at the least provocation. To do that, of course, does not improve the world. Even though in this age and generation more and smaller political entities are being created under the impetus of what is called nationalism and independence, the time will come when we will have to reverse the trend and those people who have become separate will have to become united again so that they may attack the economic, social and other problems of the world in unison. They will have to attack those problems as a common force rather than as separate entities which, as well as trying to attack the problems of the age, are attacking one another.

I was very pleased to be present at this conference and to see the beautiful country of New Zealand from one end to the other. I say unhesitatingly that the leader of our delegation exercised not merely tolerance but charm in his treatment of ourselves and many delegates, both ladies and gentlemen, who met us in New Zealand. I congratulate Mr. Parkes who, despite the peculiarities not only of myself but of some of my colleagues, was able to maintain his equanimity right to the end. On this occasion even Government members of the delegation were delightful confreres in delightful conditions. We all sought to secure an end that would be in the interests of the nation of Australia that we were representing.

Mr CURTIN:
Smith · Kingsford

– I should like to associate myself with the remarks of my comrades who were included in the delegation that attended the conference of the Commonwealth Parliamentary Association in New Zealand. Particularly do I join with my friend, the honorable member for Scullin (Mr. Peters), in the remarks he has made. I should like to deal with the lighter side of the conference. When all is said and done, we dealt with the heavy stuff at the conference, which was attended by 130 delegates. The conference was very enlightening indeed and our educational needs were well catered for.

The delightful people of New Zealand impressed me very much. We went to Auckland, Wellington, Dunedin, Christchurch and the wonderful Milford Sound. I must not fail to mention the wonderful welcome that was given to us by the Maori people in particular. The country is delightful. I was most impressed with the co-operation and work of the people. The affectionate welcome that was given to delegates from Australia made us feel that we were at home in our sister dominion. Being teetotallers I and the leader of the delegation had a bit of an edge on most of the delegates because we had our wits about us at all times, enabling us to see things that other delegates may not have seen. The arrangements made for the conference by the New Zealand Government were remarkable. The organisation for the conference was terrific. I could not express too sincerely my thanks to all people concerned with the conference. I express my sincerest gratitude to Mr. Norman Parkes, the secretary of our delegation, for his wonderful co-operation and assistance. He looked after us as if we were his own boys, not that he is old enough to have boys as old as we are. He looked after us in a truly fatherly manner. The attention given to us by Mr. Parkes ensured that we had a wonderful time and that we enjoyed the conference thoroughly. On behalf of all members of the delegation I again thank Mr. Parkes. If we are lucky we may be chosen to accompany Australia’s delegation to the next conference.

Mr DAVIS:
Deakin

.- As one who did not attend the conference may I briefly intervene in the debate to congratulate the leader of the delegation and the secretary of the delegation on the form of the report represented to this Parliament. I commend a study of the report to all honorable members because it contains information of extreme value to any member of parliament within the Commonwealth. Today there are ample avenues for conference by governments. That fact is self evident. There are the United Nations, the Commonwealth Prime Ministers’ Conference and a dozen other world conferences. But within the Commonwealth this Commonwealth Parliamentary Association conference is a meeting of members of parliaments, not members of governments. From that fact two points emerge. As members of parliaments of the Commonwealth we have a great deal more in common in many respects than do representatives of governments, because as members of parliaments we are jointly concerned, no matter from what part of the world we come and no matter what is the colour of our skin, with maintaining the common traditions that we all have inherited of some form of parliamentary democracy and of procedures and practices designed to adjust the parliament to the needs of today.

So we go to such a conference with, as the honorable member for Corangamite (Mr. Mackinnon) said, a number of matters on which we can agree. It is true that in discussions a number of matters arise on which delegates differ, but I have taken part in a good many negotiations and it is my experience that in the process of negotiation you can find that in respect of some matters you are on common ground with those with whom you are negotiating. From there you can move slowly to a larger area of accord. This is of value and it is happening in the Commonwealth. Those who care to read the Australian delegation’s report will find that Australia has played a significant part in the business presented to the conference and that we have been ably represented by our delegates. A perusal of the report will show clearly that the delegates to the conference in New Zealand upheld the traditions of delegations to other conferences in maintaining Australia’s place in the Commonwealth Parliamentary Association. It is not without significance, in a world where we tend to concentrate at times on the matters that divide us rather than on those on which we agree, that this process of members of parliament meeting together is producing some kind of good will and understanding among all nations represented at these conferences, lt is true that it does not produce complete understanding. It is equally true, however, that by this process we open the door to understandings - no more, perhaps, but certainly no less. That is an extremely valuable contribution. The work that the Australian representatives have done and are doing, and the contributions they make to the formal and informal sides of the conferences, have, I think, built up throughout the world a very substantial measure of goodwill towards us.

In the past all roads in the Commonwealth led to the United Kingdom, because the United Kingdom was the centre of what was the British Empire, then the British Commonwealth and then the Commonwealth of Nations. I think that Australia has done something in that respect, but I think it should do more. I do not mean that it should interfere with the old roads that lead to the centre of the Commonwealth, but that it should build new roads that lead to and from this country. I believe that if we can do that we will build up goodwill that will benefit both Australia and the Commonwealth.

Question resolved in the affirmative.

page 196

ADJOURNMENT

Aluminium - Newspaper Article

Motion (by Mr. Fairbairn) proposed -

That the House do now adjourn.

Mr HAYDEN:
Oxley

.- Tonight I want to raise a few points in relation to the production of primary aluminium at the smelters in this country. Before I do so, I must apologise to the Minister for National Development (Mr. Fairbairn). There is a form of courtesy in this House which requires that before one rises to speak on the adjournment debate one announces to the appropriate Minister the subject that one intends to raise so that he may be able to throw some light on the points raised or give his point of view. This I neglected to do, through an oversight.

I turn to the question of the investment that is taking place in this country today in the production of primary aluminium. I think that what is taking place, having regard to the present capacity of this industry and its potential capacity, clearly shows the necessity for planning of the economy of this country. It is, in itself, a clear exhibition of the way in which lopsided investment can take place in a sector of the economy. Of course, this is very much to the detriment of the economy. I shall give some details to support my contention, but it seems to me that what could easily happen in the production of primary aluminium in this country is that one of the big three smelters which will be operating by about 1970 could fold up.

These smelters have a capital investment which varies between £25 million and £30 million. Those are the figures that I have been able to obtain. At present we have two smelters producing primary aluminium in Australia. They are Alcoa of Australia Pty. Ltd., at Geelong, which has 51 per cent, foreign ownership, and Comalco Aluminium (Bell Bay) Ltd., at Bell Bay, which has more than 90 per cent, foreign ownership. The capacity of these two smelters is approximately 90,000 tons, which is one and a half times Australia’s present consumption. In 1964 the production of primary aluminium in Australia was approximately 79,000 tons, and last year it rose to 86,000 tons. In 1964 the domestic consumption of primary aluminium was 64,000 tons. I have not got the figures for 1965.

It is significant to note that the surplus has to be sold overseas. The home price for primary aluminium is £260 per ton and the world price is £245 per ton. That means that on these flat prices there is a loss of £15 per ton on the primary aluminium that we have to sell overseas. Of course, we must add freights to this. I have estimated that we export somewhere between 15,000 and 20,000 tons of primary aluminium a year. In addition, the Australian Aluminium Co. Ltd., known as Australuco, which is a totally owned subsidiary of Aluminium Ltd. of Canada - Alcan - in a tariff submission said that, in comparison with the price on the Australian market, selling on the world market involves a loss of between £40 and £50 a ton. A little quick estimating reveals that losses in exports vary between £600.000 and £800,000 or £750,000 and £1 million, depending on whether the loss is taken at £40 a ton or £50 a ton. This is significant, and a little later I will elaborate on my suspicion that the domestic consumer will be expected to prop up the surplus capacity of this industry, if it is to be sustained.

The production at Bell Bay is 52,000 tons of primary aluminium a year. Alcoa produces 40,000 tons a year. Australuco the totally owned subsidiary of Alcan, intends to establish at Newcastle a smelter that will be in operation by 1969 and will produce between 30,000 and 40,000 tons of primary aluminium a year. But by then we will be using only the full capacity that is now available in the existing two smelters - those operated by Comalco and Alcoa. I stress that even if we lift the home consumption of primary aluminium from 12 lb. a head to 18 lb. a head, the output of the Alcan smelter at Newcastle, or its equivalent, will be surplus to the community’s needs. In recent times, some rapid manoeuvring has occurred in this industry. Alcoa made an application for tariff protection. It was supported by Comalco with some qualifications. Then Alcan made the sudden announcement that it would establish a smelter at Newcastle. In addition, Comalco announced in late December that it would spend another £4,500,000 to lift the production of its Bell Bay smelter by 1 7,500 tons a year by 1 967. This is a one-third increase in the output of this smelter. Further, the consortium that will be exploiting the Gove reserves has undertaken to produce alumina, as distinct from primary aluminium, by 1971. A production capacity of 500,000 tons is planned. I expect the answer to a question I have placed on notice to confirm that this consortium has given an undertaking that it too will establish a smelter for the production of primary aluminium.

We then have the position that the productive capacity of which Alcan is capable will be surplus to requirements, the extra 17,500 tons that Comalco will produce will be surplus to requirements and the Gove production will be surplus to requirements. Where will we sell all this material? Will we sell it overseas at a much lower price than we are getting on the home market and at a time when there is a world surplus of aluminium? To give a clear indication of the existence of this surplus I have only to direct attention to the treatment that President Johnson handed out to the United States aluminium cartel when it endeavoured to raise the price of aluminium.

Knowing that there is a world surplus of aluminium, he threatened to release the Government’s stockpile, which was significantly large, and, realising the effect that this would have on the world’s surplus of aluminium, the monopoly group withdrew its proposal to increase the price. I point out that Australuco, which is owned by Alcan, has been responsible for 50 per cent, of the sales in Australia of semi-fabricated aluminium. Since 1964, first as a result of import licensing policies and then as a result of tariff policies, it has been using about 20,000 tons of Australian primary aluminium. When it produces its own aluminium at this smelter, capable of an output between 30,000 and 40,000 tons, we will find that Comalco or Alcoa, or both, are going to suffer a fairly severe setback. Their best market because of cost disadvantages is going to be in this country. The largest single demand for their output has come from Australuco, but it is going to produce its own primary aluminium and will have a surplus capacity. So we can see that excessive investment is taking place in the production of primary aluminium in Australia.

In 1964 Alcoa had a loss of £1.6 million. It has paid up capital of £25 million. Comalco - I have seen it variously quoted - had a profit of £684,000 or £437,000 in 1964. It has a paid up capital of £30 million. That is a pretty poor return. What concerns me, first, is that we are going to have a situation where the consumer is going to have to pay a high price to subsidise a low price gain in export. Secondly, I want to know why this sort of investment is taking place willy nilly. I cannot see where there is any advantage to this country or its economy in this situation. The Parliament is entitled to a report from the Treasury or the Department of National Development indicating whether the losses presently sustained by the established smelters, the increased capacity of production and so on, can be integrated into the economy without any cost disadvantage to the community or whether we are going to have to prop up, again, an uneconomic position in which there is disproportionate investment in this sector of the economy while starving other sectors.

Mr SPEAKER:

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

Mr COUTTS:
Griffith

.- Mr. Speaker, it is quite a long time since I intruded on the patience of honorable members at this time of the evening. First, I apologise to honorable members for asking them to listen to me at this stage of the evening. But there is a matter on which I wish to speak for just a few moments. It is a matter of importance, I think, to members of this Parliament who may find themselves somewhat confused because of the attitude of the Press. The Press is a great instrument of public opinion in Australia. 1 regard the Australian Press very highly. It helps in the shaping of the opinions of our people. I believe that its powers should never be limited. But it has the responsibility to respect the integrity of individuals. It should endeavour to regard itself at all times as an instrument that is here to serve in the shaping of the opinions of the people along honest and genuine lines. So I consider that, while the Press should not be attacked in an irresponsible way by members who feel themselves hurt, it has a responsibility to see that individuals in public life are respected.

On Tuesday of this week the Prime Minister (Mr. Harold Holt) moved a motion in which the House recorded its regret at the death of the former Prime Minister of Nigeria, Sir Abubakar Balewa. Mr. Speaker, you will permit me, I am sure, to quote the words of the Prime Minister regarding Sir Abubakar Balewa who met a tragic death in a massacre in Nigeria. The Prime Minister described this deceased statesman, one of the leading figures of the Commonwealth, as a man who was calm and dignified in his demeanour. He said that he was widely acknowledged as a man of integrity, fairness, courage and sound judgment. Further, the Prime Minister said his reputation had grown steadily since 1952 when he first entered politics in the Nigerian Federation. The Prime Minister went on to say that Sir Abubakar Balewa believed deeply in democratic standards, in fairness to all and in free speech. Our former revered Prime Minister, Sir Robert Menzies, described him as a respected leader, clearminded, sagacious, tolerant and just. He said: “The world can ill afford to lose men of this quality.” I was one who deeply regretted the butchering of this great Commonwealth statesman.

I was pained to read an article in one of Australia’s leading journals, the Melbourne “ Herald “, which controls the “ Courier-Mail “, a leading journal in Brisbane. The article, which I read last night in the Melbourne “ Herald “, tells of bribery that existed in th*e Nigerian Government according to the Press of that country. I think that the article was ill timed, particularly as this Parliament had so recently paid its respects to the late Prime Minister of Nigeria and had expressed such deep regard in the words spoken by the Prime Minister. I am sure that had other honorable members in this place read the article in last night’s Melbourne “ Herald “ they would have been as upset as I am. Consequently I believe that honorable members will allow me the indulgence to make some reference to this article which, in my opinion is really shocking and does no justice to the Press.

The article in the “ Herald “ stated -

The military regime has opened a campaign to rid Nigeria of corruption which wasted many millions in the five years since independence.

The campaign ranges from a crackdown on those who try to bribe traffic policemen to a review of the tariff structure, which was rigged by crooked Cabinet Ministers to protect their own business interests.

Stories of official graft circulated before Prime Minister Sir Abubakar Tafawa Balewa was killed and his government overthrown last month.

This was a reference to the gentleman we spoke about in such high terms on Tuesday last. The article continued -

Foreign businessmen planning investments here found they had to accommodate Cabinet Ministers and their friends with “ dash “ (bribes), jobs and special favors. “ You can’t buy a Nigerian Cabinet Minister,” said one U.S. executive, “ but you can rent them for the afternoon”.

The article made reference to special cases of bribery. It referred to the Finance Minister who would be the equivalent of the Treasurer who sits in this place. The article stated that the Finance Minister who was killed in the revolt was known as the King of Bribes and that the evidence indicates that he deserved the title. It went on to say that import duties on plastic shoes increased steeply after he built a factory to make them in his home town. The article suggested that he sold the shoes back to the Government and it also suggested that he died while trying to bribe his executioners not to kill him.

Mr. Speaker, in view of this article and in view of the statement of the Prime Minister, my own leader (Mr. Calwell) and the leader of the Australian Country Party (Mr. McEwen) I am, I might say, bewitched, bothered and bewildered. I am confused because on the one hand we have the magnificent tributes paid to a leader of a Cornwealth Government and a member of Her Majesty’s Privy Council, and on the o.’her hand we have the Press one day later writing in such derogatory terms of this gentleman who was the victim of a revolution in his country.

Mr L R Johnson:

– Is there any truth in the Press statement?

Mr COUTTS:

– That is what I am confused about. I thank the honorable member for throwing in that interjection. In his statement the Prime Minister said that this man was a man of integrity and honour but now I find the Press accusing him of everything that is base in public life, dishonesty, bribery and corruption. As I have said, I am bewildered about the whole thing.

I believe that a responsibility must be thrust upon the Press to ensure that before articles relating to prominent figures in the life of the Commonwealth of Nations are published, steps should be taken to ensure that they are honest, true and factual.

I am concerned about this matter. Only a few minutes ago we were discussing the recent meeting of the Commonwealth Parliamentary Association in New Zealand. Nigeria, like Australia, is a member of the Association. I am most upset about what has happened and, in view of the Prime Minister’s statement, I must express my horror at the article which was published. I hope that the Press will exercise greater care in future in relation to these matters.

Question resolved in the affirmative.

House adjourned at 10.42 p.m.

page 200

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated -

Visits to Asia by Former Prime Minister. (Question No. 1331.)

Mr Hayden:

n asked the Prime Minister, upon notice -

  1. Since Sir Robert Menzies became Prime Minister in 1949, how many official trips did he make to Asia?
  2. When was the last trip made?
Mr Harold Holt:
LP

– The answer to the honorable member’s question is as follows -

The following are the official visits made by Sir Robert Menzies to Asian countries since 1950-

July-August 1950 - Japan.

December 1950-February 1951 - Singapore,

India, Pakistan.

April 1957- Japan, Malaya, Philippines, Hong Kong

April-July 1959 - Pakistan, India, Singapore.

December 1959 - Indonesia, Malaya, Cocos Islands.

February-March 1961- Thailand.

Ministerial Visits Overseas. (Question No. 1332.)

Mr Hayden:

n asked the Prime Minister, upon notice -

  1. How many Cabinet Ministers have made official visits to Asia in each of the past five years?
  2. In respect of each visit, what was (a) the name of the Minister concerned, (b) the purpose of the visit and (c) the length of time spent in Asia?
Mr Harold Holt:
LP

– The answers to the honorable member’s questions are as follows -

  1. Seventeen Ministers have made official visits to Asia in the past five years.
  2. The Minister, the duration of each visit and the countries visited are listed below -

CABINET MINISTERS.

Sir Garfield Barwick:
PARRAMATTA, NEW SOUTH WALES

May-July 1962 - Hong Kong, South Vietnam, Korea, Taiwan, Japan, Cambodia, Thailand, Burma, Malaya, Indonesia.

November-December 1962 - Pakistan, India, Laos

December 1962 - Philippines.

March 1963 - Philippines.

April 1963 - Malaya.

September 1963 - Malaysia.

April 1964 - Philippines.

Mr Fairbairn:
LP

–

March-April 1964 - Thailand, Malaysia.

Mr Fairhall:
Minister for Defence · PATERSON, NEW SOUTH WALES · LP

May-August 1963 - Thailand, Singapore, India, Pakistan, Japan, Hong Kong.

Mr Hasluck:
LP

–

June 1964 - Indonesia, Thailand, Cambodia, South Vietnam, Laos, Malaysia.

May 1965 - Burma, Thailand, Malaysia.

November-December 1965 - Philippines, Cambodia, Thailand, Laos, South Vietnam, Malaysia, Singapore.

Senator Henty

August-September 1965 - Malaysia.

Mr Harold Holt:
LP

August-October 1960 - Japan.

Sir Robert Menzies (as Minister for External Affairs) -

March 1961- Thailand.

Mr McEwen:
Minister for Trade and Industry · MURRAY, VICTORIA · CP

–

July-August 1963 - Japan.

September-November 1965 - India, Japan.

Senator Paltridge

December 1960 - Iran.

March 1964 - Malaysia.

January-February 1965- Japan, South Vietnam, Thailand, Malaysia.

Senator Spooner ;

June-July 1960 - Japan.

Mr TOWNLEY:
DENISON, TASMANIA · LP

y -

March 1962 - Singapore.

June 1962 - Indonesia.

OTHER MINISTERS.

Mr Anthony:
CP

–

June-July 1964 - India, Pakistan, Ceylon

Mr Chaney:
LP

y -

July 1964 - South Vietnam, Laos, Cambodia, Thailand.

Dr Forbes:
LP

–

July 1965 - South Vietnam.

Mr Freeth:
LP

May-June 1965 - Japan, Taiwan,Phillipines, Korea.

Senator GORTON:
HIGGINS, VICTORIA · LP; IND from May 1975

–

November 1960 - Japan.

December 1960 - Sarawak.

Mr OSBORNE:
EVANS, NEW SOUTH WALES · LP

e -

December1960- Thailand.

There were many reasons for the visits listed above and it is therefore not practicable to give the purpose of each visit as requested by the honorable member.

Australian Capital Territory: Boy Scout and Girl Guide Halls. (Question No. 1490.)

Mr J R Fraser:
ALP

ser asked the Minister for the Interior, upon notice -

  1. What financial assistance has the Commonwealth given in the Australian Capital Territory within the past three years for the construction of Boy Scout halls?
  2. How many Boy Scout groups or districts have been assisted with grants towards the construction of halls in that period?
  3. How many Boy Scout halls have been constructed by the Commonweatlh assistance in that period?
  4. How many halls are under construction with guarantees of Commonwealth assistance?
  5. What future commitments has the Commonwealth in this field?
  6. What financial assistance has the Commonwealth given in the Australian Capital Territory within the past three years for the construction of Girl Guide halls?
  7. How many Girl Guide groups or districts have been assisted with grants towards the construction of halls in that period?
  8. How many Girl Guide halls have been constructed by the Commonwealth or completed with Commonwealth assistance in that period?
  9. How many halls are under construction with guarantees of Commonwealth assistance?
  10. What future commitments has the Commonwealth in this field?
  11. Will the Commonwealth extend to the Girl Guides Association in the Australian Capital Territory, pro rata on a membership and district basis, the same financial assistance as has been given to the Boy Scouts in the Australian Capital Territory?
  12. If not, why not?
Mr Anthony:
CP

– The answers to the honorable member’s questions are as follows - t, 2 and 3. During the past three years the Boy Scouts have constructed four Scout Halls at Downer, Narrabundah, Red Hill and Deakin, valued in all at about $32,000. Based on the value of work done by the Scouts’ own efforts, the Commonwealth assisted by grants totalling $6,960.

In addition an old building was removed from Acton, re-erected at Yarralumla and converted for the joint use of Boy Scouts and Girl Guides at a cost to the Commonwealth of approximately $8,000.

  1. None.
  2. Provision has been made in the current year for a further $8,000 towards the cost of three more Scout Halls but the actual subsidy will depend on the value of work financed by the Scouts themselves. 6 to 10. In addition to the Yarralumla Hall already referred to, the Commonwealth at a cost of approximately $2,400 moved an old building from Duntroon and re-erected it at Gungahlin for use by Girl Guides as a camp.

Recently the Girl Guides sought Commonwealth assistance in providing two balls on the north side of Canberra for their sole use. The National Capital Development Commission is taking action to construct one hall at O’Connor at an estimated cost of $14,000. The whole cost will be met by the Commonwealth and the Guides will have full use of it at a nominal rental.

A Community Centre is being provided at Commonwealth cost at Downer and it has been suggested to the Girl Guides that they use the centre as a meeting place, at least for the time being. 11 an 12. While the Government is very appreciative of, and has always encouraged the work done by youth welfare organisations in the Australian Capital Territory, and has given them assistance in various ways, there is a limit to what it can do in this direction. Because of this it has been suggested to the Boy Scouts’ Association and the Girl Guides that they should consider ways and means of making joint use of meeting halls. My Department is still awaiting the outcome of this suggestion and when it is settled consideration will be given to what additional assistance, if any, is warranted.

Army Recruiting. (Question No. 1499.)

Mr Daly:

y asked the Minister for Defence, upon notice -

What was the cost of advertising, etc., in connection with the campaign to obtain recruits for the Army in each of the past five years?

Mr Fairhall:
LP

– The answer to the honorable member’s question is as follows -

The cost of advertising, etc., in connection with the campaign to obtain recruits for the Army in each of the past five years is set out hereunder -

Government Employees: Payment while on Military Service. (Question No. 1512.)

Mr Whitlam:

m asked the Prime Minister, upon notice -

  1. In what circumstances and to what extent do the Government and Commonwealth statutory authorities (a) pay or make up the salaries of employees who are on military service and (b) require them to maintain their superannuation contributions?
  2. On what dates, by what means and with what results has the Government communicated with State Governments concerning the salaries and superannuation contributions of the employees of those Governments and their statutory authorities while on military service?
Mr Harold Holt:
LP

– The answers to the honorable member’s questions are as follows - 1. (a) Officers and employees employed under the Public Service Act who are called up for military service are subject to the following conditions in relation to salaries during military service -

  1. as a member of the Defence Forces in time of war or as a member of the Defence Forces allotted for duty in an area in which the Forces of the United Nations are engaged in war like operations, full salary is paid for the first 14 days of military service;

    1. as a member of the Citizen Forces undergoing annual training or attending a school, class or course of instruction conducted for the training of members of the Citizen Forces, full salary is paid for the full duration of the annual training or school, class, etc., as the case may be.
    2. Contributors under the Superannuation Act 1922-1965 are required to pay contributions at the normal rates while on leave of absence for military service.
    1. Such correspondence as has passed between the Commonwealth and State Governments in relation to National Servicemen has not touched on the subject of salaries and superannuation contributions of employees of State Governments and State statutory authorities.

Cite as: Australia, House of Representatives, Debates, 10 March 1966, viewed 22 October 2017, <http://historichansard.net/hofreps/1966/19660310_reps_25_hor50/>.

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