20th Parliament · 3rd Session
The President (Senator the Hon. A. M. McMullin) took the chair at 2.30 p.m., and read prayers.
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Senator McKENNA presented petitions signed by officers of executive councils of unions and associations of Commonwealth public servants praying that the Parliament rectify an alleged injustice by granting immediate increases of marginal rates for skill of all Commonwealth public servants.
Petitions severally received and read.
Senator KENDALL presented a petition signed by 48 members of the Commonwealth Public Service on the same subject.
Motion (by Senator Kendall) agreed to-
That the petitionbe incorporated in Hansard and taken as read.
The petition, incorporated accordingly, wax as follows : -
The Honorable the President of the Senate, and Senators in the Senate assembled.
The Humble Petition of the undersigned Officers and Employees of the Commonwealth Public Service respectively sheweth -
. That, for many years, Commonwealth Public Servants have been advised by the Prime Minister, his Ministers, the Public Service Board and the Public Service Arbitrator that the process of adjusting marginal rates of pay must be done according to the principles of comparative wage justice.
That, organizations covering employees of the Commonwealth Government have tried to secure justice by conciliation and arbitration following these principles.
That, the marginal rates of analogous groups of employees in the private enterprise field, in the State Government and Local Government fields have been increased in both the official award section and unofficial rates section, whereas the marginal rates of their analogues within the Commonwealth Public Service have been “ frozen “ by the frustration of the principles and process of comparative wage justice.
That, the principles of comparative wage justice can be respected and applied by the Public Service Arbitrator or the Public Service Board, but have been applied, and very notably so, by Parliament as recently as in 1947 and 1948.’
That, “the Prime Minister and Parliament should now apply those principles broadly by ordering an interim marginal increase to all employees of at least 50 per cent of existing margins and with a money minimum of 30s. per week.
That only through such action by the Prime Minister can those injustices be undone and justice done quickly.
Your petitioners, suffering a most serious injustice pray that Parliament and the Prime Minister will act to do justice and from this day.
And your petitioners, as in duty bound, will ever pray.
Petition received.
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– Is the Minister for Shipping and Transport correctly reported as having stated that he was satisfied that shipping freight rates to and from Tasmania were reasonable? Is the Minister aware that Tasmanian freight rates have increased from 21s. a ton in 1939 to 119s. a ton for timber and 133s. 6d. for potatoes? If the Minister admits that those figures are correct, is that not an admission of failure by the Australian Government to solve a pressing national economic problem? “Would the Minister be prepared to accept from the States power to resume control of shipping freights which are a major factor in pricing Tasmanian commodities out of Australian and overseas markets?
– A tremendous amount of propaganda about freight rates is being preached by certain people. A recent investigation of the three main ser-. vices to Tasmania revealed that with a freight charge of £7 10s. a ton the Australian Shipping Board was sustaining a loss on its operations. Out of that £7 10s., no less than £4 18s. l1d. was absorbed by loading and unloading charges and the wages of crews.
– How much represented profits?
– The honorable senator must be pretty stupid. I have just said that the Australian Shipping Board is losing money on the Tasmanian service. An investigation was also made of the freight rate on timber carried from Tasmania to the mainland, and it was found that, in spite of the present high freight charge, a loss was being sustained.
A further investigation of the carriage of wheat from the mainland to Tasmania also revealed that the present freight rate was resulting in a loss. For the financial year ended the 31st March, 1953, the board’s net profit, after making provision for 4 per cent, interest on Treasury advance, was only £65,000 on the whole of its operations round the Australian coast, involving more than 30 Commonwealthowned vessels. We realize how important it is to keep freight rates down, and surely the fact that the Government is now sustaining losses on some of its shipping services will convince honorable senators on that point. I am sure that no honorable senator would suggest that further losses should be carried at this stage. Misleading statements have also been made about the method of determining freight rates. The Australian Shipping Board now deals with about one-third of the total freight carried on the Australian coast. If a freight rate is to be varied, the very able officers in my department confer with the independent shipowners, and with the Associated Steamship Owners. The operating figures of the Australian Shipping Board should be sufficient to convince honorable senators that much of the talk that one hears about excessive freight charges is nonsense.
– Can the Minister say whether it is true that one of the major shipping companies trading to Tasmania has advised the Department of Shipping and Transport that a reduction of freight charges of £1 a ton could be effected if waterside workers in Tasmania would work a twilight shift from 6 p.m. to 11 p.m. and maintain the present rate of loading and unloading? Is it a fact that the Communist secretary of the Waterside Workers Federation has vetoed the working of such a shift in Tasmania ?
– My departmental officers were informed that if the union would agree to the working of a twilight shift and so enable ships to spend more time at sea and less in port, freight rates could be reduced by approximately £1 a ton. I immediately got the officers in my department to make full investigation and to follow it up with a conference with representatives of the union. I am sorry to say that the union representatives turned down the proposal and refused to work the extra shift. From our own close and comprehensive examination, we are satisfied that unless ships can spend more time at sea and less time in port there is little chance of reduced freight rates while wages and other costs are as high as they are to-day. Before 1939, the ships spent a fortnight at sea for every week they stayed in port. The position has been reversed now.
– I desire to preface a question to the Minister for Shipping and Transport by reminding the Senate that yesterday, in answer to a question by Senator Laught as to why Adelaide was being by-passed by the three largest P. and O. liners, the Minister stated that one of the reasons was the number of hold-ups at Australian ports. As this reply clearly implied that such hold-ups were the cause of the ships by-passing Port Adelaide, will the Minister inform the Senate of the number of occasions on which these ships have been delayed at Port Adelaide due to waterfront troubles? If the answer to this question is “ nil “, will the Minister apologize to the Port Adelaide waterside workers, who justifiably resent this unwarranted attack? Further, when, the Minister referred to a hold-up at Port Adelaide last week, was he aware that all mail ships which arrived at that port last week were worked by the waterside workers with no delay?
– I think I made it clear yesterday that recent holdups at Sydney and Melbourne have had a disastrous effect on the time spent in Australia by large overseas ships. That is one of the reasons why they will by-pass Port Adelaide on several of their voyages. I have made the strongest representations to the agents for the ships concerned who have assured me that ships are held up in Australia longer than in any other country in the world.
– Can the Minister for Shipping and Transport inform me whether the Government has considered continuing the payment of the subsidy in respect of the steamship Taroona, which plies between Melbourne and Tasmania, for the year ending May, 1955? If so, what is the estimated amount required for the subsidy?
– The subsidy will be continued until that date. Speaking from memory, it is estimated that the amount required will be £150,000. Fm that sum, the company carries all mail not carried by air.
– The Minister for Shipping and Transport said earlier this afternoon that freight rates could be reduced by £1 a ton if waterside workers worked a twilight shift. Will the Minister indicate whether he has received a guarantee from the shipping companies that freights will be reduced accordingly if waterside workers accede to that request ?
– I have a report on this matter that was made by my department and I am prepared to accept the word of those who are engaged in that industry.
– Will the Minister give a guarantee?
– I have had sufficient guarantee to satisfy me that a reduction could be brought about, and that is more than Senator Aylett can do.
– In replies to Senator O’flaherty yesterday and to Senator Toohey to-day, the Minister for Shipping and Transport referred to shipping delays at Outer Harbour and Port’ Adelaide. Can the Minister recall on how many occasions during the life of this Government overseas and interstate passenger ships have been delayed beyond the scheduled time of departure at Port Adelaide or Outer Harbour? If the Minister finds on reflection, as I am sure he will, that any such delay that has occurred was not the fault of the waterside workers, will he apologize for their inclusion in the statements that he has made this week ?
– The number of occasions on which such events have occurred are too numerous to mention. If the honorable senator were supplied with a detailed report on the subject and could understand it, I am sure that he would :receive a shock.
– Is the Minister for Trade and Customs aware that passengers travelling from Tasmania to Melbourne in the ship Taroona have to fill in a form stating the number of pieces of luggage in their possession? This form is not checked by any official on the ship, but must be shown to a checking officer at the exit gate on the wharf. That officer counts the number of pieces of luggage in a taxi or other vehicle, and it is then allowed to proceed. As the passengers are only interstate visitors, why is a check required? Can action be taken to cancel any previous orders requiring that check so that the irritating delays that now occur will be eliminated?
– I am not aware of the details of the matter referred to by the honorable senator, but a rumour did come to my ears about the existence of an unsatisfactory state of affairs. I have called for a report and should I find the situation to be unnecessarily irksome or burdensome I shall certainly have it straightened out.
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– Has the attention of the Minister for National Development been directed to an article, published in the London Daily Herald, that calls for governmental investigation of Great Britain’s ignominious retreat from Australia in connexion with a £20,000,000 sterling contract let by the Snowy Mountains Authority ? Is it correct to say that the award of the contract to an American company came as a cold douche after the royal visit to Australia had given fresh glory to cherished Commonwealth relationships? Is it a fact that the project will live in history as an engineering enterprise in this country for which no British firm competed? Is it true that this is the latest and biggest triumph for America, which is penetrating Australia and teaching this young continent to look for enterprise, not to London; but to Washington? What action does the Government propose to take in reply to these statements, which reflect unfavorably on the people of this country, who still have strong ties with the Motherland and appreciate that the people of the British
Empire still possess the skill and grit that made them pioneer bridge and dam builders? Is this Government so tied to America with dollar loans and other trade associations that, in order to ensure that the contract for the Snowy River project, the announcement of which was so timely, would go to America, the United Kingdom was not given even an opportunity to tender for it?
– I shall do my best to reply to the second-reading speech that the honorable senator has delivered. I shall not endeavour to reply to his questions one by one. Instead, I shall recapitulate the history of this matter. This is the second big job to be done on the Snowy Mountains scheme. The first was the Guthega project. This is the AdaminabyTumut section. As the scheme progresses, there will be other big projects of a comparable nature. Tenders for this project were called throughout the world. They were, of course, sought particularly in Great Britain, because the skill, knowledge and experience of British contractors is acknowledged. During the period allotted for the submission of tenders in Great Britain, it was seen by the Snowy Mountains Authority that no British contractors were taking up the specification documents in order to submit- tenders. The authority made special representations to the British Board of Trade. It directed the attention of the board to the situation that had arisen, and asked the board to tit make known to British contractors the fact that their bids had been invited. The Board of Trade, having done so, told the Snowy Mountains Authority that no British firms were interested. Those are the circumstances in which the tender was let. Of course, this matter was of tremendous importance to Australia. “Whilst on the one hand we wished to maintain our connexion with British contractors, on the other hand it was absolutely necessary for us to obtain the benefit of competitive tender prices in connexion with this major public work. The Snowy Mountains Hydro-electric Authority did all that was reasonably practicable for it to do in an endeavour to attract British tenders. Opinions differ on why British firms did not enter the field. I shall disregard the honorable senator’s attempt to make political capital out of the situation. I have heard advanced as a reason why British firms were not interested, the fact that the Snowy Mountains scheme is one of the big engineering jobs in the world for which tenders on other than a cost-plus basis have been invited. During the postwar years British engineering firms have been able to obtain contracts for engineering projects and open-cut mining in Great Britain on a cost-plus basis. In this instance tenderers were required to submit tenders for individual activities, under the contract system. It may be that this new form of competitive tendering was not attractive to British firms, in view of the volume of work still offering on the other side of the world. I think honorable senators will agree that big projects in this country, such as the Snowy Mountains scheme, should not be undertaken on the day-labour or cost-plus system. Rather should big, efficient engineering concerns possessing the know-how be required to submit firm tenders, in competition with other organizations, and make a profit or incur a loss, as the case may be, according to the accuracy with which their bids were prepared.
– Will the Minister for National Development inform the Senate of the circumstances which governed the decision of the Snowy Mountains Hydro-electric Authority to give the contract for generating equipment to Sweden rather than to Great Britain, particularly as I understand that the contract for turbines was given to British manufacturers.
– Somewhat the same set of circumstances exists in relation to the contracts for turbines and generators as that in relation to the other contracts. Tenders were called throughout the world for four turbines and four generators. The final decision of the authority was to accept tenders for two turbines and two generators, with an option to purchase two other turbines later. The tender price for the four turbines was approximately £1,000,000. The actual figure in respect of the tender which was accepted for the two turbines has been published. The British tender for the turbines was the lowest tender and won the contract on its merits. In respect of the generating equipment, tenders were received from Great Britain as well as from other countries, but it was not possible to accept one of the British tenders because they were not competitive. The lowest tender for the four generators was approximately £1,000,000, and the tender which was accepted was approximately £250,000 lower than the lowest British tender, despite the fact that the successful Swedish tenderer will have to pay £100,000 more duty than would a British tenderer. In view of the large number of tenders which, I hope, the authority will be inviting over the years, it is absolutely essential that contracts should be let on a competitive basis. “We could not afford to reach the stage where continental or other manufacturers would not be prepared to tender because of the belief that the contract would not be given to the tenderer who quoted the lowest price. As far as the generators are concerned, the fact is that the successful tenderer was awarded the contract on the merits of his tender.
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– Has the attention of the Minister representing the Minister for Health been directed to a recent report by the American Cancer Council, “which stated that lung cancer deaths in men had increased by 500 per cent, during the last twenty years? Will any scientific research be undertaken by the National Health and Medical Research Council in an endeavour to ascertain the cause of this dramatic increase in the incidence of this dreaded disease?
– I have read newspaper reports about the matter. I shall be pleased to refer the honorable senator’s question to the Minister for Health and obtain a considered reply for her as soon as possible.
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– Has the Minister for National Development seen a notice in the Western Australian of the 8th April in which the State Minister for Lands, the Honorable E. K. Hoar, announced that an expedition was shortly to leave for the Kimberley region of Western Australia in order to carry out an extensive survey for the purposes of land settlement and development? Is the Federal Government associated with this scheme and, if so, in what way?
– When I discussed this matter with the Western Australian Minister for Lands, some months ago, he asked whether the Commonwealth would co-operate in the expedition. I told him that the Commonwealth would do so and, in the circumstances, it might have been more charitable of him to have made some acknowledgment of the fact that the Commonwealth was co-operating in the expedition. Discussions have taken place between Commonwealth officers and the Surveyor-General of Western Australia on this matter. The Land Research and Regional Survey Section of the Commonwealth Scientific and Industrial Research Organization is supplying officers to work with the Western Australian officers, and the Department of National Development will bear the cost of the survey that will be carried out by the officers of the Commonwealth Scientific and Industrial Research Organization. After my interview with the Western Australian Minister for Lands I approached the Minister for the Army on this subject and, as a result, the Department of the Army will make trucks and crews available free, for the purpose of transporting the expedition. In addition, the maps of the area which the survey party will use were provided by the Commonwealth from an aerial survey which was made some time ago.
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– Approximately twelve months ago I asked the Minister representing the Minister for the Army a question concerning the provision of suitable places for divine worship at the main military camps in Australia, and I then received an assurance that attention would be given to the matter. I have since found that the position has not improved. Will the Minister invite the attention of his colleague, the Minister for the Army, to a report made by the chaplain of the Royal Military College, Duntroon, in which the following passage appears : -
Sunday services of the Church of England and United Services with Protestant denominations were at first held in the gymnasium, but at the beginning of April were moved to the picture theatre. There being no chapel, the arrangements for divine service remain as somewhat makeshift, and there is no opportunity for a place of quiet to meet the need to provide prayer at other times.
Was the Government sincere when it stated that it desired a high spiritual standard for the Australian Army, and does it intend to carry out its promise to establish suitable chapels in the military camps of Australia? Does the Government think it fair that the young men of Australia should be taken into such camps without proper provision being made for the holding of divine services ?
– May I ask the honorable senator for the date of the report from which he has quoted?
– It is dated the 6th April, 1954, and refers to the period ended the 3rd December, 1951.
– So that it is more than two years old?
– It is, and the position is the same in Western Australia.
– Then I think that that is indicative of the lack of sincerity of the honorable sena- tor. He quoted a report, which is apparently two years old, without acknowledging that fact. I, of course, do not know the details offhand, and therefore I shall have to ask the honorable senator to place his question on the notice-paper. I have a clear recollection of a discussion with the Minister for the Army at the time that this matter was raised approximately two years ago, and I also have a clear recollection that the Minister stated that places of worship would be provided in military camps. I shall be very surprised indeed if that has not been done. I shall also be surprised if the facts coincide with the exaggerated statements, made by the honorable senator in his question.
– Will the Minister representing the Minister for the Army state whether be is prepared to give an assurance without abuse that, conditionsoperating in the Greylands camp area,, which chaplains have reported to be most unsatisfactory, will be improved at an early date?
– If I heard thehonorable senator correctly, he asked whether an assurance could be given with- ‘ out abuse.
– That is correct.
– I might beentitled fairly to say in reply that if the honorable senator asks a question in a fair and legitimate manner, I shall always endeavour to give him a courteous answer, but when an honorable senator quotesfrom a report that is two years old and makes no acknowledgment of that fact, human nature being what it is, I might not be as courteous as I would be otherwise. I have already told the honorablesenator that his earlier question on thismatter will be placed upon the noticepaper. The Minister for the Army will” reply, and I shall be astonished if thereply substantiates the complaint that Senator Cooke has made.
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– Will the Minister for Trade and Customs inform theSenate whether it is a fact that underrecent legislation, the procedure in respect to the importation of Scotch whisky has been so altered that instead of being classified under category B,. the importation of whisky is now under theheading “ Administration “ ? What effect will this change have on thequantity of whisky to be imported ? Will it be increased or decreased? What arethe reasons for the change?
– It _ is true that there has been a changein the classification of whisky from category B, to Administration. Whetherthat change of classification will result in the importation of a greater orlesser quantity is a matter for conjecture. My own opinion is that it will not make any substantial difference. No doubt honorable senators will appreciate that the importation of liquor, particularly of spirits, should be in the hands of traditional dealers who have a reputation to maintain. Spirituous liquors are liable to adulteration, particularly when the supply is short, and because of the price, if they get into the hands of unscrupulous persons. In that way, great harm can be caused to the community. The department has always endeavoured to keep such trade in the hands of traditional traders, and at present it is having no difficulty in doing so.
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– In view of the many exaggerated reports that have appeared in sections of the press and in propaganda pamphlets issued by a political party, will the Minister representing the Prime Minister inform the Senate whether the Government has considered the provision of a Royal residence in Australia and whether a decision has been reached ?
– All that I know about the suggested provision of an Australian residence for Her Majesty, Queen Elizabeth the Second, is what I have read in the press. The matter has not been considered by the Government. I am sure that many formalities and preliminaries would have to be considered first. For example, the personal wishes of the Queen would have to be consulted, and the views of the United Kingdom Government would have to be obtained. Although I am sure that an overwhelming majority of the Australian people would be delighted to see the Queen, as Queen of Australia, have her own residence in this country, I am afraid that the immediate prospect of such an arrangement is most unlikely.
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– Last year,” the Government decided to lift the pay-roll level at which employers would be exempt from the payment of pay-roll tax. A large proportion of those who had paid the tax were thereby exempted from its application, but I am informed that the Commissioner of Taxation still requires persons who are no longer liable to pay the tax to furnish returns. Will the Minister representing the Treasurer examine the necessity for the continuance of that procedure, which is apparently wasteful, with a view to giving relief from it?
– I shall be happy to make representations to the Treasurer along the lines that the honorable senator has suggested.
asked the Minister representing’ the Treasurer, upon notice -
What amounts were collected by the Commonwealth in petrol tax for the years 1951-52 and 1952-53, and what proportion of the tax was made available to each State during the years mentioned?
– The Treasurer has supplied the following answer: -
The total collections of customs and excise duties on motor spirit in 1951-52 and 1952-53 were £26,490,554 and £27,334,195 respectively. The Commonwealth Aid Roads grants paid to the States in these years were -
In addition £02G,000 in 1951-52 and £702,000 in 1952-53 was spent on strategic roads and roads of access to Commonwealth property and upon the promotion of road safety.
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– Can the Minister representing the Postmaster-General say whether a quantity of steel rails has been forwarded to Western Australia recently by, or on behalf of, the PostmasterGeneral’s Department for use as telephone poles in the Kalgoorlie area ? If so, from which State or States have they been obtained ? What is the weight of the total consignment? Are the rails being forwarded by ship to Fremantle and then by road to Kalgoorlie, a distance of 370 miles ? If so, what will be the freight and handling charges for each ton delivered at Kalgoorlie or other destinations ? What would the charges have been if the rails had been sent by ship to Fremantle and then by rail to Kalgoorlie or destination or entirely by rail by the Trans-continental Railways?
– The honorable senator was good enough to inform me that he proposed to ask several questions on this matter. The Postmaster-General has furnished me with the following information : -
No delivery to this department in Western Australia of steel beams or rails has been made during the past twelve months. Some steel beams which were imported in 1951, and which were delivered direct to Fremantle from overseas, were recently forwarded from Fremantle by road to points between Southern Cross and Kalgoorlie. This was the most economical arrangement possible because beams had to be delivered at points of erection for poles.
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– I direct a question to the Minister representing the Minister for Immigration. Immigrants coming to this country include natives! of Holland who fought with the Dutch underground forces during the war under the direction of the British. After the invasion and the recapture of Holland, many of them fought with the British forces. I should like to know whether such immigrants are eligible for naturalization upon fulfilment of the two years’ residential qualification ?
– I am afraid I cannot answer that question immediately, but I shall make inquiries from the Minister for Immigration and inform the honorable senator of the result.
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asked the Minister representing the Minister for the Navy, upon notice -
What ships of Her Majesty’s Australian Navy will be permanently based at Darwin or will he visting there during the next few months f
– The Minister for the Navy has supplied the following answer to the honorable senator’s question : -
It is the policy of the Navy to keep warships in northern waters for training and policing duties and for showing the flag. In accordance with this policy the Royal Australian Navy frigate Condamine left Sydney for Darwin on Monday, the 5th April, to relieve the frigate Hawskesbury for training in northern waters and for general patrol duties. She will arrive at Darwin on Sunday, the 18th April, and the Hawkesbury will reach Sydney on the 22nd
April. Condamine would be the fourth Royal Australian Navy frigate to serve on patrol there in the last twelve months. The frigates would be assisted in their work by smaller craft, one of which is a fast armed patrol boat which has recently undergone complete overhaul. Ships of the Royal Australian Navy regularly passed through the northern area on their way to and from Korea. The aircraft carrier Vengeance, the battle-class destroyer Ansae and the tribal-class destroyer Bataan would visit Darwin and the northern islands on their way back to Sydney after they had handed the Royal liner Gothic over to ships of the East Indies station near Cocos Island on Monday. The survey ship Warrego has also been allotted for duty on the north-west coast of Western Australia. On her way to Exmouth Gulf she would call at Cairns and Darwin. Relative to the development of Darwin as a naval base the essential naval base facilities have been provided at Darwin and could quickly be got ready to service a fleet. Wharf and workshop facilities, the fuel tank farm and other operational facilities are in an efficient state. It is a credit to all who mail the establishment and the officers and their men should be complimented for the good job they are doing.
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asked the Minister representing the Treasurer, upon notice -
-The Treasurer has supplied the following answers: -
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– I present the following reports of the Public Accounts Committee : - 12th Report - Postmaster-General’s Department. 15th Report - Repatriation Department.
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Motion (by Senator O’Sullivan) proposed -
That during the present session, unless otherwise ordered, Standing Order 68 he suspended to enable new business to be commenced after 10.30 p.m.
– I oppose the motion. The purposes of Standing Order 68 are quite clear. It is designed to prevent the Senate from being taken by surprise on the introduction of legislation and it is directed at the process of legislation by exhaustion. If the motion proposed by the Minister for Trade and Customs (Senator O’Sullivan) were carried, and it were coupled with a contingent motion, notice of which stands in his name, providing for the suspension of the Standing Orders to enable a bill to be passed through all its stages without delay, a measure could be introduced after 10.30 p.m. this evening or any other evening during the remainder of the session and the debate on it would have to proceed immediately, if the Government so desired. The Opposition would be wanting in its duty if it did not object to the procedure now proposed and to that possibility. For those reasons, we oppose the motion, but we should oppose it in any event. It would be less objectionable if the Minister gave an assurance to the Senate that, if a bill were introduced after 10.30 p.m., the Opposition would not be required to debate it until at least the following day. But, whether the Minister gives such an assurance or not, the Opposition, standing on its rights in this matter, will oppose the motion.
. - -in reply - The Opposition has adopted a typical attitude to this motion. I do not propose to reply in detail to the Leader of the Opposition (Senator McKenna) because, as he has said, he and his colleagues will oppose the motion in any event.
Question put. The Senate divided. (The President - Senator the Hon. A. M. McMullin.)
AYES: 31
NOES: 27
Majority . . 4
AYES
NOES
Question so resolved in the affirmative.
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Debate resumed from the 12th April (vide page 103), on motion by Senator Spooner -
That the bill be now read a second time.
– The purpose of the bill before the chamber is to ratify an agreement already entered into to borrow 54,000,000 dollars from the International Bank for Reconstruction and Development, repayable with interest at 4¾ per cent in fifteen years’ time. This is the third loan that has been made to Australia by the International Bank since 1950. The first loan, of 100,000,000 dollars, was arranged in August, 1950; the next, for 50,000,000 dollars, was arranged in July, 1952. The present loan of 54,000,000 dollars is equivalent, in Australian currency, to approximately £24,000,000. The three loans from this source since 1950 total 204,000,000 dollars. Both the preamble to the bill and the agreement made between the Commonwealth and the International Bank plainly contemplate that there will be further loans during the five-year term that is under contemplation. Although there is no mention of this aspect of the matter, under the projected arrangement there will still be the possibility of further loans from this source.
The Commonwealth will not be permitted to apply the proceeds of the present loan as it wishes; they must be applied in the purchase of generally specified goods, the details of which will be worked out by the International Bank and the Commonwealth. The last feature of the loan upon which I wish to touch as to details is that there is to be a further charge apart from interest, a commitment charge of f per cent, on any balance of the loan undrawn from time to time. That provision is significant, because the history of these loans shows that some years elapse before the moneys are paid out and appropriated to particular purposes. In the interim, the Commonwealth is under an obligation to pay interest at the rate of f per cent, per annum on any moneys undrawn pursuant to the loan.
I shall now make an observation on borrowing generally. As I have contended before in this chamber, the wrong time for a business to borrow money is when the business is sick and failing, not doing well, and not making profits, because the burden of capital and interest repayments over a period only adds to the difficulties with which such a business is confronted. Obviously, the common-sense thing to do is to look into the internal workings of that business, and, as a first step in an adjustment, put it on a sound basis. It is wrong for the business, under those conditions, to borrow money and pour it down the sink after moneys that have already gone. I submit that this line of reasoning applies equally to governments. The right time for a business to borrow is when it is making profits and requires money for extensions to enable it to earn additional profits. Similarly, the right time for a government to borrow is when the economy is sound, and when things are progressing.
– That is what we say.
– At least we are agreed on one point so far ; but henceforth we shall differ. Let us consider the present position of the Australian economy, and whether the Commonwealth of Australia is justified, in the circumstances, in borrowing money. I say at once that when I review even some of the features of our economy, I can at least raise very grave doubts in this connexion, leading to the conclusion that the Government should not borrow abroad, in view of the conditions at present operating in Australia. I am not going to take the opportunity to review all the sins of omission and commission of the Government during the last four and a half years; it will be sufficient for my purpose to select a few items. I shall refer first to inflation. The Government claims, with pride in its voice, and a wonderful audacity in its heart, that we have reached stability in Australia. When it came to office in 1949, the basic wage was £6 19s. a week. If the recent . cost-of-living adjustments were added, it would now be £12 a week. All of the increase, with the exception of £1 a week, has been due to the fact that inflation has run riot in this country. The Government dropped the reins right at the outset, lost the leadership that was accorded to it by the Australian people, and followed a policy of complete inaction in relation to inflation. Our economy is poised precariously on the pinnacle of an inflation spiral; it has not settled down to a level. The Commonwealth Court of Conciliation and Arbitration, in desperation at the state of the economy, had to do the job that the Government did not do. It had to make an attempt, at least, to call a halt. That was a desperate step, which should have been taken, not by the court, an outside body completely free of governmental control, the primary function of which is to resolve differences between employers and employees, but by the Government, which is charged with responsibility for the finances of this country.
– la it suggested that the Government had authority to do that?
Senator McKENNA I suggest there are many steps that the Government might have taken.
– Does the Leader of the Opposition believe that the Government had authority to peg wages ?
– Certainly not, but in 1950 when we of the Opposition moved for a prices referendum-
– Did it include wages ?
– Let me finish-
– But did it embrace wages?
– If Senator Wright cannot contain himself, and wants to make a speech, I shall move that I be given leave to continue my speech later. In October, 1950, when we sought a prices referendum and, in fact, carried the motion in this chamber, on behalf of both the Opposition and the trade union movement of this country, I put this proposition to the Government : That if it would support price control in Australia at a federal level, the trade union movement would agree to the pegging of wages. I made that announcement with the full authority of the trade union movement as long ago as October, 1950. in this chamber. The Opposition then warned the Government of what would happen if it did not support price control. The Government was given an opportunity of which it did not take advantage. From that moment inflation ran riot. Who is now satisfied with the stability of an economy in which a decision on increased margins for workers has been postponed until next November so that, in effect, wages are pegged until then? Who can be happy about that very explosive industrial situation? The Government claims that we have a stable economy. Yet the situation might topple at any moment.
– What reason is that for not proceeding with development by borrowing ?
– I began with the proposition that the time to borrow is when business is sound and I1 am developing the theme that the Australian economy is far from sound. I add, for good measure, that the fault for that position lies with the Government.
– How long is it since the trade unions agreed to wage pegging?
– October, 1950. They agreed to it provided that there was an effective federal control of prices and profits. It would be unjust and immoral to ask the workers of Australia to halt inflation by themselves while prices run riot and profits take, their course. It is in those circumstances that this loan is being arranged. The Government has claimed that it has achieved great stability in Australia.
– So it has.
– In 1950, the Minister for National Development (Senator Spooner), representing the Treasurer (Sir Arthur Fadden), said that there was nothing that the Government could do about inflation. He said that it was a matter for the people themselves.
– What has that to do with borrowing money ?
– I have already indicated that. The Minister for National Development disclosed the hopeless, helpless attitude of the Government by the statement to which I have referred. Then, in an effort to halt inflation, the “ horror “ budget was sponsored by the Government which budgeted for a surplus of £100,000,000. The Minister for National Development, representing the Government, announced at that time that this amount was being taken in taxation from the people so that it could be put where it could do the least harm ; so that it could not be spent and so exert a further upward pressure on the inflationary spiral. The- Minister for National Development announced outside this chamber that not a penny of that money would be spent except over his dead body.
– I rise to order. The budget of 1951-52 has nothing to do with a bill authorizing an overseas loan in 1954.
– I have been arguing, Mr. Deputy President, that the wrong time to borrow is when an economy is unstable and I am seeking to establish the present instability of our economy. I submit that I am completely in order in proceeding along those lines.
The DEPUTY PRESIDENT (Senator Reid). - I have been following the argument of the Leader of the Opposition, which has been along the lines that he indicated, and, at this stage, I cannot allow the point of order.
– I have been provoked into speaking at some greater length than I intended by interjections from the Government side of the chamber.
Another feature of our economy is the existence of import restrictions which were introduced in circumstances which everybody knows. Before the introduction of import restrictions, the Government had welcomed a flood of imports. Then, finding sterling balances in London draining out, it clamped down import restrictions. How did our credit fare? The repudiation of overseas contracts that was necessitated by import restrictions did the gravest harm to on economy and it did .unrepairable harm to our prestige overseas. The fruits of the Government’s action have just been seen in the failure of the latest Australian loan to be floated in London, only 56 per cent, of which has been subscribed. It is obvious that our prestige has been damaged. Those who lend money are very concerned about .prestige. They do not like to lend to a country that repudiates contracts. They do not like to lend to a country which allows its balance of payments to run riot and then introduces the most severe import restrictions.
The fact that inflation has run riot has had two effects. It has prevented many of our own industries from selling in export markets that they had hitherto enjoyed and they have been priced out of others. It has also prevented them from competing effectively with imported commodities although previously they had a real advantage over those commodities. This circumstance resulted in the Minister for Trade and Customs (Senator O’sullivan) taking certain action in this chamber recently. The flood of applications for tariff protection was so great that the Minister had to set up two boards to cope with them. I believe that the Minister for Trade and Customs is at present seeing a deputation from the fish canners of Australia which is pointing out that they are being forced out of business by the importation of Canadian salmon. That position has been brought about by inflated costs. Anybody who claims that Australia has a stable economy and could properly borrow loan money should look under the surface in order to see through the audacity of the Government’s claim of stability. When Australia is reduced to the position of having to go on to the public loan market, in a small country in Europe, for what amounts to petty cash, I suggest that we have been dishonoured before the world and that our Government has lost all sense of dignity. Such borrowing makes me ashamed and embarrassed.
A Government senator interjecting,
– I do not mind what honorable senators opposite call me as long as they recognize the colossal mass that the Government which they support has made of our economy. I suggest that the proper thing to do, before we attempt to borrow overseas, is first to look at the internal economy of the country and set it straight. All this overseas borrowing is a confession of failure by the Government. It must damage our prestige. It is allied to inflation, repudiation of contracts, import restrictions, and the rest.
I remind honorable senators opposite of what happened in London within the last week or two, when only 56 per cent, of a loan sought by the Australian Government was subscribed. Great indignity, to my way of thinking, attaches to the spectacle of a country with an annual income of £3,500,000,000, and a national government with an income of £1,000,000,000, going on to the public loan market in Europe in order to raise £A.6,000,000. It indicates that our prestige is so bad that no other government would lend the money. The three banks which underwrote the loan at a very high charge were not prepared to lend the money themselves. If the money were urgently needed, a loan should have been arranged in five minutes between the Commonwealth Bank and another bank on the other side of the world, since there is ample security in the Commonwealth Bank. Surely there was no need to pledge the whole authority and assets of the Commonwealth for miserly £ A. 6,000,000.
– Yes, but the Swiss dollars are convertible to hard currency uses.
– I appreciate that. The Opposition cannot be impressed with the urgency of the loan when it considers the facts in relation to two previous dollar loans. For instance, the 100,000,000 dollars borrowed in August, 1950, were not completely used until 1953. On every penny that remained undrawn from time to time the Commonwealth paid an additional f per cent, interest over a period of three years. That was not good business. Then, in relation to the 50,000,000 dollars borrowed in July, 1952, although the Minister stated in his second-reading speech that import licences had been issued for the full amount, he did not say a single word to indicate that any portion of that loan had been expended. Yet almost two years have elapsed since the loan was arranged. During that period we have paid f per cent, interest on the undrawn portion. One must assume that several years will elapse before the present loan is used and that the Commonwealth will again pay £ per cent, interest on the undrawn portion year after year. In those circumstances, the Opposition suggests that there was obviously no urgency for the loan.
– Will the honorable senator vote against the bill?
– Yes, decidedly. I had intended to announce that intention before I concluded my speech.
The loan with which the Senate is concerned can be justified only if we are in need of dollars to purchase capital equipment which will enable us either to save dollars or to earn dollars. The Minister, in his speech, confined his remarks concerning the need for the loan to one sentence - “Dollars remain . in relatively short supply.” He made not the slightest attempt to justify that statement, although I believe it to be true. One might have expected him to canvass that position a little more fully. For instance, he might have referred to Australia’s position in relation to the Empire dollar pool, but he did not even refer to that matter. I should like to know what our position is in that respect. Are we in credit or in debit? I venture to say that the Government does not know and has no information on the matter. I should also like the Minister to say whether the Government has explored the possibility of Australia receiving credit in the Empire dollar pool for all the wool, metals and other commodities which we send to the United Kingdom as raw materials and which enable that country to earn dollars by the sale of manufactured goods. Surely Australia is entitled to a moiety of credit for dollars that are earned in that way. Does Great Britain get the lot? I am certain that the Government does not know the answer to those questions. From time to time, members of the Opposition have inquired about Australia’s position in that respect, but they have never received the slightest information. I strongly suspect that the Government does not know what the position is. In my opinion, the matter should have been fully canvassed before further borrowing on the dollar market was undertaken.
– How does the honorable senator suggest that the value of such credit could be arrived at?
– I imagine that it would be easy enough for the United Kingdom Government to determine the number of dollars which have been earned by goods, made from Australian raw materials, which have been exported to dollar countries. Surely it is a matter that accountants and statisticians could assess with ease. What effort has this Government made to obtain credit from the United Kingdom Government in that connexion? It may well be that, if our claim were properly prosecuted, there would be no need for us to borrow dollars. It might be found that we were in credit with the pool. The Minister should advert to this subject when he replies.
– Does the honorable senator suggest that the sterling area has a surplus of dollars ?
– I do not suggest any such thing. I am suggesting that it is important to :know whether Australia has a credit or a debit in the Empire dollar pool, and I am saying deliberately that I believe the Government does not know the position.
– A credit or a debit against whom?
– Against any other country in the dollar pool.
– If we have a credit, would that mean that we should not borrow dollars?
– When it is a matter of Australia’s interests against the interests of other countries, I am an Australian.
– An isolationist!
– Not at all, but I do not like to see the credit of this country pledged, and its future mortgaged, in the matter of dollar earnings when, perhaps, we could assert a righteous claim to more dollars from the dollar pool. I do not think that the Government has tried to exploit that position. Do not let anybody tell me that I am antiBritish when I say that, because I have been a member of a government which made wonderful gifts to the United Kingdom, including £25,000,000 on one occasion and £10,000,000 on another. I have the greatest sympathy with Great Britain, because of what it has done in the past and is doing now, but the ‘ duty of an Australian Government, in financial matters, is primarily to Australia. I suggest that, at least, the Government should know where it stands in relation to the Empire dollar pool, and I assert that it does not know the true position.
No assurance was contained in the Minister’s second-reading speech that a proper canvass had been made of sterling areas for the goods that we need, nor did the speech contain an announcement of the intention to establish in Australia industries capable of producing goods that might enable us to earn dollars. What has the Government done, if anything, to encourage the establishment of such industries?
– I thought that the honorable .senator said, only a little while ago, that our industries were all going broke.
– I said that many industries were seeking protection. There are many approaches to this problem, but the Minister, in his speech, adverted to none of them. Instead, he made the bald statement that we are short of dollars. He did not say that the Government was encouraging the establishment of industries which might enable us to earn dollars, nor did he refer to the purchase of equipment, which we so badly need, from sterling areas.
– The f per cent, interest on the undrawn portion of the loans goes back only to July, 1952.
– That is so, but it will apply as long as there is a balance undrawn. I fear that we may be paying that f per cent, for the next three years, if the Government runs true to the form it displayed in relation to previous dollar loans.
The Government is seeking the lazy, incompetent and easy way out of its financial difficulty. In effect, it is trying to meet our dollar deficiency by mortgaging our future dollar earnings. I say that that is bad business. Our liability to repay the capital of these loans is now coming home to roost. In December last the Treasurer (Sir Arthur Fadden) remitted 12,000,000 dollars, and in March last he remitted a further 6,000,000 dollars on account of capital repayment of loans.
– That was a shortterm loan to the International Monetary Fund.
– That is correct, but repayments of the earlier loan of 1950 are due and have to be met. Capital payments are beginning to accrue and, in my opinion, it is exceedingly bad business to mortgage our future in this way at a time of dollar stringency. We must face our liabilities and repay principal and interest on the due date. This borrowing is only making the dollar position more and more difficult for Australia.
I expected the Minister to refer to another aspect of this matter. Australia imported in the last financial year from the United States of America goods valued at 87,000,000 dollars. In return, the United States of America took from Australia only 57,000,000 dollars’ worth of goods, leaving a marked dollar deficiency against Australia. I should like to know how many of the consumer goods that we bought from America last year could have been omitted from our orders. Were there any that could have been dropped so that we would have been able to buy capital assets without borrowing.? The Minister also omitted to state in his second-reading speech other facts regarding the importation of consumer goods. Broadly, the loan is explained to the Senate with only two bald statements - we are short of dollars and we are borrowing some. No information has been given to justify such borrowing. The Government has not explained its reasons.
Certain general headings as to how the money is to be allocated are set out in the agreement, but the Minister was careful to state that the allocation was only tentative. He indicated that it could be altered by agreement with the bank and that it would be altered as the specific needs of importers emerged. In other words, the Government does not know with any degree of particularity why it is borrowing this money. That is a particular reason why the Opposition does not like the Government’s approach to the loan.
There is little room for wonder, in the circumstances that I have put to the Senate, why Australia is getting the loan under such disadvantageous conditions. The rate of interest at 4J per cent, is far too high. We are not free any more. There was a time when Australia could please itself upon what projects it expended the proceeds of a loan, but the International Bank- for Reconstruction and Development ties the borrower down to particular headings in fairly broad detail. That aspect of this financial proposition does not do credit to Australia. The lender can police the application of the money that is borrowed from him. That is not good for the dignity or prestige of the Australian community.
– Is there any bank that does not act in that way in the case of a private loan ?
– We are not discussing private loans but a governmental loan, and that is in an entirely different category.
– The International Bank for Reconstruction and Development might have had some experience with the prodigals who preceded this Government.
– The Opposition is not encouraged to support this loan by reason of anything that has happened in the balance of Australian payments with the dollar area. There has been no significant change in anything that has happened between the United States of America and Australia since we borrowed 100,000,000 dollars in 1950 and, subsequently, 50,000,000 dollars. Therefore, the Opposition has no encouragement to support this loan. The Government has been inept, incompetent, unscientific and unsystematic in its approach to this loan as is apparent from the deficiencies in the Minister’s second-reading speech. The Government is like Micawber. It is trying to meet its obligations in dollars by issuing I O U’s and mortgaging the future dollar needs of Australia. Meanwhile, it is praying that something will turn up in the interim to solve its problems for it.
– Something did happen in Micawber’s case.
– He finished in gaol.
– No, he finished in Australia.
– He finished in gaol. When Micawber wrote an I O U he said, “ Thank God, that debt ha3 been paid “, and that is the attitude of thi3 Government. It forgets that it will have to pay principal, interest and a charge of f per cent, that is mounting all the time against Australia and eating into its dollar earnings year by year. For the reasons that I have given, the Opposition will oppose this measure. We will carry our opposition to the point of voting against it. We do not expect that vote to prevail, but at least we shall record an emphatic protest against the incompetence of the Government in the matter of Australian finances.
Senator LAUGHT (South Australia) “4.20]. - I rise to support the bill. I was interested to hear the Leader of the Opposition (Senator McKenna) say that he would take the responsibility of voting against a measure that is, I believe, of tremendous importance to Australian development, in which the Government has taken a close interest. The Leader of the Opposition appears to expect some answer to his remarks, and I assume that he made them seriously. He has a habit of speaking in this chamber with an air of great seriousness, but I hope that I shall be able to convince the Senate that when his arguments are examined, they cannot be taken seriously. He compared the Australian economy to a sick business. We have obtained the loan that is under discussion, and now we require only the formality of its ratification by the Parliament. Why have we been able to obtain the loan? We have it because the great Internationa] Bank for Reconstruction and Development, composed of men of the highest business acumen and integrity in the world have granted the loan to us after investigation. Would they grant a loan if the national economy were sick? Of course they would not. This is the third loan that the International Bank has granted to Australia and the loans have been granted with a m minimum of preliminary investigation or fuss and bother. The first loan of 100,000,000 dollars, raised in 1950, when the Prime Minister (Mr. Menzies) visited the United States of America, was obtained in a record short time. I believe that only ten days were occupied in completing the formalities of the loan, whereas some other countries, when they seek loans, are visited by economists who investigate fully whether they are loan worthy. In 1952, a second loan was raised, and that has been followed by the loan that is under discussion.
The Leader of the Opposition became* somewhat hysterical when he referred to the loan of 1950. I have in my hand a document which was issued within the PaSt few days. It i3 the report of the National Security Resources Board which was created in 1950 by and through the foresight of the Prime Minister (Mr. Menzies). The report is not a minority report. It was confirmed by all who were associated with it, and the personnel of the board is of particular interest. Among the members of the Board are Dr. Coombs, who is the Governor of the Commonwealth Bank of Australia, Sir John Kemp, who is the Queensland Labour Government’s Co-ordinator-General of Public Works, and Mr. A. E. Monk, the President of the Australian Council of Trade Unions. Others include the head of the Broken Hill Proprietary Company Limited and the Secretary of the Defence Department. This is an up-to-date report which has been received by honorable senators within the past week, and it should convince the Leader of the Opposition and his supporters of the soundness of the Australian economy. In the summary of the report, the board has stated that Australia’s population grew by onetenth between January, 1950, and September, 1953. Such a tremendous growth of population demands the expenditure of large sums of money on capital works for the housing, education and the assimilation of the additional people. It is probably one of the greatest increases of population that has occurred in the history of any civilized country since statistics have been taken. Surely that of itself is proof that loan money must be obtained to service the additional population! The second paragraph of the summary states -
Available resources in the economy are now fully employed without any significant sign of shortages, and previous inflationary rise nf prices and costs have been checked.
I submit to honorable senators that thin report should be accepted in preference to anything that might be said by the Leader of the Opposition or his supporters. Referring to agriculture the report states -
There has been a striking improvement in outlook. Shortages have largely disappeared, and the supply position for machinery and other farmers’ needs has become much better.
Then the report deals with the supply of fuel and power, and it states -
All the Eastern States had a deficiency of electric power in the first part of the period, but in 1953 there was a marked improvement, and supply is approaching adequacy though reserves are probably insufficient Probably at the moment business is consolidating rather than expanding, and this aspect of the consolidation of business is of tremendous importance . . . Cost-plus has mostly disappeared ane firm contracting, at fixed prices has returned.
TI) at clearly shows that Australia will get value for the money that is to be expended. Possibly the difficulties of the cost-phis system, which was prevalent a year or so ago, might have been a determining factor in causing the Government at that time not to borrow the full amount of dollars then available. Probably, also, that is why the Government thought it better to pay a fee of % per cent, for holding the money unused. I believe that there is no necessity for me to quote further from the report to show that the Australian economy is sound and is ready to progress.
I shall not deal with the prestige of the Swiss loan. That is rather a small matter to discuss on such an important occasion. As a matter of fact, I believe that it is rather remarkable that the money from Switzerland, which is to bo used for a specific purpose, should have been borrowed. The Leader of the Opposition made a mistake in referring to one matter. I believe that the 4j per cent, that Australia will pay for the dollar loan includes 1 per cent, that goes towards the capital of the International Bank for Reconstruction and Development. That 1 per cent, is really capital upon which we, as shareholders of the international bank, will eventually draw provided the operations of the bank are conducted on business-like lines. It is not a matter of paying 4f per cent. in the way of interest. We will pay 3f per cent, interest and 1 per cent, will go into capital. We are borrowing dollars not for consumer goods but for basie capital goods. In an under-developed country such as Australia - I have already mentioned population - it is important that new assets should be established. The money necessary for such work can be obtained in three ways, apart, of course, from such methods as inflating the currency by using the printing presses. Tt can be obtained from the savings of the people, from taxation, or from borrowings outside this country. The savings of the people are truly remarkable, and great progress has been made since this Govern ment came to office in 1950. In South Australia, savings in the savings banks alone total about £150,000,000, which is more per capita than anywhere else in the Commonwealth. However, we cannot expect to get the capital required for the development of this country from the savings of the people. We cannot and should not get it from taxes. Already this Government has abolished the land tax and the entertainments tax; the pay-roll tax has been reduced, and income tax rates are lower now than they have been for many years. So, we are not trying to tax the people to obtain the money required to develop Australia. We are seeking that money by way of overseas loans. Apparently, if the Opposition in this chamber had sufficient numbers to defeat this bill, they would do so and so deny the dollar loan to Australia. How, then, do honorable senators opposite suggest that the money required for development should be obtained ? Do they favour a capital levy on the savings of the people ? Do they want taxes to be increased? If so, let them stand up and say so.
I should like now to say something about the details of the loan. The Leader of the Opposition claimed that no details have been given about the proposed use of this money. I point out, however, that the schedule to the bill clearly shows that the money is for use by the Australian Government and its subordinate authorities, the State governments and their subordinate authorities, and by private industry. The agricultural and forestry programme is to take 13,000,000 dollars, and, as a South Australian, I am very pleased to know that one of the projects upon which some of the money is to be expended is land settlement of exservicemen on Kangaroo Island and in the Coonalpyn Downs. As some honorable senators may know, the Coonalpyn Downs are portion of a remarkable area of South Australia which has good rainfall but which, because of a soil deficiency, has not been successfully farmed. However, thanks to the Commonwealth Scientific and Industrial Research Organization, and to the heavy equipment that has been made available as the result of the first and second dollar loans, and will be added to by this loan, vast areas suitable for soldier settlement will be ready in about five or six years. Will the Opposition take the responsibility of voting against this bill, knowing that if the measure is defeated money will not be available from dollar sources to purchase materials and equipment needed to carry on this great developmental work ? I invite South Australian members of the Opposition to tell us how they propose to cast their votes, knowing that some .of the money has been specifically earmarked for the Coonalpyn Downs project, soldier settlement on Kangaroo Island, and forestry work. Electricity undertakings will receive 500,000 dollars, and the road transport programme 10,500,000 dollars. The latter work will include the restoration and maintenance of existing roads and bridges, the reconstruction of existing roads, road deviations, realignment and widening, and the construction of new roads and bridges. Would the Opposition deny this money to the Government so that it would not be able to proceed with that work?
I come now to the railways programme. It was my privilege about eighteen months ago to travel to Western Australia in the new trans-continental train, which has cut one day from the journey to our isolated west. The money for the diesel electric locomotives and the modern airconditioned train was made available from dollar loans. Will the Opposition endeavour to defeat this bill so that progress of this kind will be halted? Every one of the diesel-electric locomotives came from dollar sources. Machinery and machine tools, to help Australian manufacturers, are to be bought with the funds to be provided under this loan. Apparently the Opposition would be prepared to oppose that programme also. I hope that I have been able to convince most honorable senators that the opposition to this measure is not well founded. I think I am correct in saying that we may reasonably decline to take seriously the speech made by the Leader of the Opposition this afternoon.
– I am afraid I must disabuse Senator L’aught’s mind of any belief that he has convinced anybody. He has not even convinced himself because he knows that some of his statements were not correct. For instance, he spoke of the new trans-Australian train. I have recollections of seeing German pictures everywhere on that train. It was built by the Germans. Dollars had nothing whatever to do with it. The honorable senator also spoke of what he termed the Coonalpyn Downs. Some tory silvertails may know it by that name, but the ordinary South Australian ellis it the Ninety-mile Desert. Senator laught also mentioned machinery, but he did not tell us about the machinery that has broken down. He asked whether, in view of certain projects that had been undertaken with borrowed money, the Opposition was prepared to deny further dollar funds to the Government. I say that whatever has been achieved, whether by loan money or any other kind of money, has been achieved by the toil of the workers. It is true that some machinery has been provided, but I shall endeavour to show that it could have been obtained without American or Swiss money.
The ACTING DEPUTY PRESIDENT (Senator Wood).- Order ! The Swiss loan cannot be discussed in this debate. It is the subject of other legislation.
– Passing references have already been made to the Swiss loan, and I intended only to make such a reference. If honorable senators are not to be permitted to refer in passing to that measure, it will no doubt be made the subject of a separate debate. The Leader of the Opposition (Senator McKenna) has explained the Opposition’s attitude to this measure. However, there are some matters that I should like to bring to the. notice of the Senate. First, I believe that capital equipment can be obtained without borrowing outside Australia. Our national income is approximately £3,500,000,000 a year. Of that sum approximately £800,000,000 is used within Australia for development and expansion. That, is the main source of the capital that is required for development and expansion. Very little comes from elsewhere. That means that this huge sum of money is the capital which enables labour forces to be applied to development and expansion.
– What proportion of that money is expended by private enterprise?
– I have not the exact figures but probably it would be about 70 per cent, or 80 per cent. I do not quarrel with that. I do not care who does the job. I am merely pointing out that a substantial portion of our national income is absorbed every year in the expansion of industry and the development of the Commonwealth. Our progress derives from our own labour and our own financial resources. Overseas borrowing is unnecessary for the purchase of items of capital equipment that ure not manufactured in Australia. Senator Laught claimed that certain machinery could be purchased only in the United States of America. He referred primarily to earth-moving equipment, but I have seen huge earth-moving machines in countries older than the United States of America. I have seen such machines being built and in operation in the United Kingdom. The honorable senator cannot hope to convince me or the people of this country that America is the only country that makes earth-moving equipment suitable for use in Australia. Diesel-electric locomotives too are made in countries other than the United States of America. We could obtain them from those countries and pay for them not with loan funds but with the credits established by our exports. Many of the items of equipment that are to be bought with the loan could be obtained in Australia. The Minister for National Development (Senator Spooner) admitted in his second-reading speech that the life of some items of equipment that were to be obtained from America would not be as long as the period of the loan. That has always been my argument, but the Government has never before admitted the truth of it. What does this mean? It means that more dollars will have to be borrowed to buy spare parts to maintain or rebuild the machines that are to be bought with the dollar loan. There will be a continuous process of borrowing dollars to buy replacements ‘ for worn-out parts of machines we have bought from the United States of America. The Minister, for the first time, has admitted that that is so. Nobody except certain people in high places knows exactly why we have to pay such an enormously high price for dollars. It is due to financial manipulation. We shall have to go on paying a high price for dollars, because we shall be forced to borrow more dollars to enable us to replace worn-out parts of the machinery we have bought with dollar . loans.
The International Bank for Reconstruction and Development has specified the purposes for which the dollars we shall get from this loan must be spent. The Minister has said that, by agreement with the bank, those conditions can be altered, but the fact remains that this loan is different from previous loans in that the bank has specified what we shall buy with it. When the Australian Government negotiates a dollar loan with the International Bank for Reconstruction and Development, the bank agrees to allow us to buy certain things with the money and we are not permitted to spend it on other things, but the negotiation of the loan releases dollars from the sterling area dollar pool, because we are not required to draw upon the pool to buy the things mentioned in the loan agreement. Under those circumstances, dollars from the sterling area pool can be used to purchase things that we could not purchase before the loan was negotiated, owing to quite proper restrictions on imports from dollar countries. It is said that we cannot buy newsprint except in America, but almost everybody knows that. at any rate until fairly recently, we obtained large quantities of newsprint from places in the northern hemisphere outside America. There is no doubt that we could still get newsprint from those places. There would be no need for us to borrow dollars to buy newsprint from America, only that, due to trade restrictions, we cannot get it from the old places, so we have to use dollars for the purpose. As I have said, that borrowing releases dollars from the sterling area pool, with the result that a lot of gimcrack and nonessential stuff is imported into this country.
Senator McKenna has told us that, under this and previous dollar loans, we shall have borrowed 204,000,000 dollars. We have been told that the loans are necessary because we can get essential equipment more quickly from America than, from anywhere else, even if it is available anywhere else. But what is the position? A report issued recently by the International Bank reveals that the second 50,000,000-dollar loan negotiated by Australia was finalized on the 8th July, 1952. Honorable senators will remember that we were told it was necessary to have that money because we wanted equipment quickly for the development of Australia, and that Americanmade equipment could be delivered speedily. But the report to which I have referred reveals that on the 30th June, 1953, we had used only 11,000,000 dollars of the 50,000,000 dollars made available to us. The Minister has said that the Government has issued import licences to cover the remainder of the money. On the Minister’s admission we have not used the whole of the loan even now, yet we were told it was necessary to borrow 50,000,000 dollars because we required certain equipment quickly. This is 1954, not 1952, but all the equipment is not here even now. So the argument that we must borrow dollars to enable us to purchase capital equipment quickly falls to the ground. Similar remarks apply to the 100,000,000-dollar loan. That loan was negotiated in 1950, but the last of the money was spent only quite recently. If we had had sterling credits equivalent in value to 100,000,000 dollars, we could have obtained the equipment that we required from other parts of the world just as quickly as from America.
This Government has borrowed or has undertaken to borrow 204,000,000 dollars. Senator Laught has said that the real rate of interest is only 3J per cent, and that the other 1 per cent, will go towards the capital of the International Bank. I say it will do nothing of the kind. It will be used to defray charges and expenses. Even on the Minister’s statement, we shall have to pay 4$ per cent, interest. Then there is another charge of £ per cent., as Senator McKenna has pointed out. No member of the Government has told us what we shall have to pay for the dollars we shall need to pay the interest on the loans and refund the capital, but we know that the present exchange rate is very adverse to Australia. Having regard to that, I should say that the actual rate of interest will be nearer to 6 per cent, than 4$ per cent, or 5-J per cent. Interest on this loan will become payable on the 1st May of this year, even if we do not draw the money for another twelve months. In view of our experience with previous loans, two years might elapse before the Government begins te spend the money. From the moment interest becomes payable, we shall have to pay approximately 9,000,000 dollars a year to America in interest and special charges on money borrowed. I say we shall be just giving that money away. We shall have to sell some of our goods to other countries, convert the proceeds to dollars and pay the dollars to American financial interests. We shall produce goods and sell them to pay interest on the loans, but we shall have nothing left in Australia in exchange for those goods. We have received and shall receive only credits. As far as 1 know, not one dollar ha3 come or will come into this country as a result of these loans. So we shall be paying 9,000,000 dollars a year for slips of paper entitling us to credits with the International Bank, or for chits that we cannot use elsewhere than in the dollar area. In addition, at the end of fifteen years we shall have to repay, in the case of this loan, 54,000,000 dollars.
Goodness knows what will happen if the exchange rate then is more adverse to us than it is at present. I recollect chat, not so long ago, the Australian people borrowed 70,000,000 dollars from America. Some of the money was borrowed by the State governments. At that time, the exchange rate was 4.86 dollars to the fi. During the war, some of the loans were converted at a considerable cost to us. We have to return 70,000,000 dollars. At 4.86 dollars to the fi, 70,000,000 dollars was worth £14,308,000. Now, owing to the adverse exchange rate, it is worth almost £30,000,000. We borrowed approximately £14,000,000 and now, because the exchange rate is adverse to us, we shall have to sell approximately £30,000,000 worth of Australian goods to repay the loan. If the relationship of the dollar and the £1 became more adverse to us, we should be even worse off than we are now.
We raised a 50,000,000 dollar loan in 1952, but by the 30th June, 1953, we had used only about 11,000,000 dollars. The Minister has said that the Government has only just issued import licences in respect of the remainder of that loan.
For the life of me, I cannot see why we should go to America to borrow anything. For that matter, I cannot see why we should go to any other country to borrow anything. I have already pointed out that we could use a percentage of our national’ income for the purposes of national development. That is what is actually happening in Australia. In 1951 our sterling balance in Great Britain dropped tremendously but, at the end of February last, it stood at about £530,000,000. It increased by about £19,000,000 in February alone. The increase during the preceding two years was approximately £300.000,000. In view of our considerable sterling balance, why is it necessary for the Government to borrow Swiss francs or American dollars? Why is it not possible to pay out. of our sterling funds for the capital equipment that the Minister has stated must be purchased abroad? Does not the Government think that we should pay £1,000,000 out of our sterling funds for a diesel-electric locomotive built in Great Britain? I do not claim to know much about diesel engines, but. I have heard mechanical engineers say that the English diesel is better than the American production. In any event, the English diesel would not be inferior to the American machine. The three dollar loans that the Government has negotiated amount to approximately £A.100,000,000, which is about the net annual credit to our sterling funds after paying for our imports from Great Britain. Nobody has gone without essential goods in this country as a result of the restriction of imports.
Fundamentally, there is very little difference between the method of our obtaining Swiss francs or American dollars. However, we must remember that Swiss francs are interchangeable with sterling, whereas sterling cannot be exchanged for dollars except at a. premium or by special arrangement. Why do we need to borrow money from Switzerland? It is going to cost Australia about £200,000 to borrow £6,000,000 from that country. If we were to use our sterling funds for the purchase of capital goods from overseas we should be able to convince the American people of the necessity for them to import certain goods from Australia. Indeed, the Americans will not allow some of our goods into their country, where they could be sold at less than similar American products.
I come now to our economic sphere. We are progressing at such a rapid rate that we need more capital equipment. We must consider how we can obtain that equipment without impoverishing ourselves. Senator Laught stated that we are prospering because we now have a greater population. That was nonsense. Both India and China have larger populations than Australia, but it cannot be claimed that those countries are more prosperous than ours. The reason that we are prosperous is that, thanks to the administration of Labour governments of the past, Australia has a well organized economy. Our employment situation is not so good as the Government would have us believe it is, but nevertheless the majority of our citizens have jobs. It is true that we have some surplus production but, as I have pointed out in this chamber on previous occasions, if we bide our time we will be able to sell all of our products. Honorable senators will recall the depression days of the thirties when, because we had overseas commitments and could not dispose of all of our products, we were forced to tighten our belts. We must not allow that state of affairs to recur. The Government should hold on and use its own resources. In due course we will be able to sell our surplus production, and thereby avoid the necessity to exploit the labour and capital of Australia, to the advantage of overseas interests. I have already mentioned that it will be necessary for Australia to export goods to other countries in order to repay our dollar loans. There will be a similar procedure in relation to the money that we have borrowed from Switzerland. We expect not to export a great quantity of goods to Switzerland, but rather to utilize the proceeds of the sale of our products in Great Britain to repay the Swiss loan. Why should we pay interest to people outside Australia? It would be more to the advantage of this country to raise internal loans, because the interest payments on those loans would provide additional employment for our people.
I shall now refer to the expansion of industry in this country, in connexion with which there has been some heartburning about the actions of this Government. On previous occasions, I have expressed my disagreement with some aspects of the expansion of Australian industry. However, if we continue to import many kinds of goods from overseas there will be no incentive to manufacturers to produce them in this country. Already the manufacture of earth-moving equipment has been discontinued in Australia, although some of the Australian-made equipment was equal to, if not better than, the equipment of American manufacture. Government senators have stated that the men who lost their jobs as a result of the discontinuance of that industry soon obtained other employment. In effect, those men, who were producing essential goods, were transferred to the manufacture of goods that were not so essential. Let us consider agricultural machinery. Surely no honorable senator believes that we could not manufacture in Australia items of agricultural machinery that are now imported. It is futile for any one to say that we cannot produce in this country bulldozers large enough for our requirements. The Minister stated that the time factor in the supply of such equipment is an important ingredient. I point out that bulldozers could be purchased from Great Britain instead of from America, as at present, and be paid for out of our surplus sterling funds. I make it clear that I shall do all in my power to prevent this Government from borrowing dollars for the purchase of capital equipment overseas instead of using our sterling funds for that purpose. The Minister occupied about half an hour of the time of the Senate in delivering his second-reading speech, which contained a great deal of propaganda. He stated -
Every bit of the equipment obtained under oUr International Bank loans is essential. Much df it is being used to expand export production, not only directly, as in agriculture, minimi and various secondary industries, but also indirectly by supplying cheaper power and transport.
I have yet to learn that the cost of power and transport has lessened since the first dollar loan was negotiated in 1950. As
Senator Ashley pointed out in this chamber last week, shipping costs have risen by 500 per cent, since 1950. The operation of diesel electric locomotives has not made railway travel cheaper to-day than it was in 1950. An honorable senator opposite has said that the increased cost of their operation has been due to a general increase of prices. The Minister’s statement in that connexion was absolutely inaccurate. ‘ Here is another statement by the Minister which is extraordinarily important: -
As in tile case of previous International Bank loans, it is intended to pay the Australian currency proceeds of our third loan into the National Debt Sinking Fund. This is provided for in clause (i. Clause 7 requires the National Debt Commission to meet repayments of principal to the International Bank as they fall due. In effect, therefore, the loan provides its own sinking fund. Payment of interest and other charges are to be met from- the Consolidated Revenue Fund.
What an extraordinary provision! The Government has proposed to enable some private firms to purchase implements by providing dollars for which the people of Australia will have to pay interest. This is really a proposal for additional governmental assistance to private enterprise. How lucky the people who obtain the import licences will be! They will be able to use dollars for which the Government will pay interest charges. Many of these firms will obtain an advance from private banking institutions in order to pay to the Commonwealth Bank the amount of money necessary to purchase the goods, but they will not have to pay any interest to the Commonwealth Bank although they will pay interest to the private banks from which they have obtained accommodation. The people of Australia will pay the interest necessary to make the overseas funds available and the private banks will get more business as a result. This legislation is in accordance with the policy that the Government has always followed. Those people who have been able to persuade the Government to grant them concessions have always benefited at the expense of the people of Australia.
.- The Senate will recall that on the occasion of the passage of the legislation covering the last two dollar loan bills the Labour party did not oppose the measures. However, it would appear that the approach of an election has brought about a change of heart and we have been assured that this particular measure will be vigorously opposed by the Opposition. The Leader of the Opposition (Senator McKenna) in addressing himself to this legislation advanced some quite airy-fairy reasons why the loans should not be obtained. 1 propose to deal later with some of the arguments that he advanced. We are indebted to Senator O’flaherty, who let the cat out of the bag by revealing why Labour is opposing this loan. To ascertain the traditional reason for Labour’s opposition to the bill we have only to examine the remarks that the honorable member for East Sydney (Mr. Ward) made when the legislation relating to the second dollar loan was before the House of Representatives. In opposing that legislation the honorable member said -
The more we borrow overseas the more we sacrifice the independence of Australia and the right of this nation to act independently, because the more we got into the hands of overseas financial interests the greater will be their power to control our domestic policy. 1 suggest that the type of policy that was expressed by the honorable member for East Sydney arises from suspicion of the lenders’ intentions and a lack of faith in our ability to repay such loans. This is an outlook that denies any hope for the future. Whether the Labour party policy is in accordance with the statement of the honorable member for East Sydney or not, the fact is that not one country in the world has been developed without the use of external capital. In the country where the International Bank for Reconstruction and Development has been established we have a classical example of a nation that has been built up with overseas capital. Until the end of the last century millions of pounds of capital was poured into the United States of America from the United Kingdom and other European countries, and it was that capital, combined with the skill of American workers and the abilities of its business administrators, which opened up its vast territory and established the commerce which has made it such a powerful industrial, commercial, diplomatic, and military force to-day.
External capital lies at the root of the extension and development of the United States of America, and it will play its part in the future development of this country.
The policy of the Labour party, which is based on suspicion and fear, is narrow and restricting in its influence on the economy. Worse still, within Labour policy are the seeds of greater economicperil. Despite what Senator O’Flaherty bas said about the ability of Australia to finance development from its national income, whatever that might mean, the fact is that our savings, which finance our development, are not sufficient to carry out all the development that we require. Consequently, it is necessary to obtain from overseas the money that we need. Any country which has not sufficient faith in its future to borrow money from overseas for its development must either retard that development or resort to the printing press as a means of financing its development. From the past performance of the Opposition and from its attitude to this bill, it seems that a Labour government would use the latter method of financing development. That method would bring in its train, first, a collapse of the export market, and then a complete collapse of our internal economy. It is an article of faith of the parties on this side of the chamber that there is room in this country for the prudent investment of overseas capital. Such investment should, of course, make some effective contribution to the economy. Loan funds, overseas or internal, used with wisdom are a tonic. Used on unproductive works they quickly bring the economy to a halt. But the record of the present Government does not suggest that it would use loan funds in that way. The Government has used dollar loans with skill and prudence. As the Minister for National Development (Senator Spooner) pointed out in his second-reading speech, agricultural industry has benefited from dollar loans to the amount of £45,000,000. The sum of £15,000,000 has been used in the modernization of roads, and £27,000,000 has been spent on electrical equipment. Apparently Senator 0’Flaherty sees no merit in that expenditure. Yet every one in Australia can recall that only a few years ago industrial hold-ups were occurring daily because of lack of power. By means of these loans the Government has brought electrical units to this country.
It might be true, as Senator O’Flaherty said, that England had tractors of a type required by this country, but those tractors may not have been available for export. Whilst many commodities that are required by Australia are made in the United Kingdom, that country requires its whole production of those commodities either for its own use or in order to fulfil commitments in other parts of the world. Consequently, they cannot be made available for export to Australia. The Government has used the proceeds of its loans in a way that has improved the economy of Australia and increased our capacity to repay the interest and principal especially as our total overseas commitment for loans, principal and interest, amounts to no more than 2 per cent, of our export income. I am familiar with the argument, which is frequently advanced, that the goods which we export will not immediately produce dollars. There may be some temporary validity in the argument, but it is one which condemns for all time the possibility of Australian industry producing goods for the dollar market. What of uranium and the industrial uses of atomic power? Could not that prove a vast source of dollars for the Commonwealth? The argument that equipment purchased with dollars is not immediately dollarproducing also denies the possibility or, indeed, the feasibility, of the British Commonwealth ever returning to sterling convertibility. Any one with a spark of commercial adventure in him and who lias watched recent happenings in the British Commonwealth must be proud of the vast advances that have been made in that sphere. We have seen the slow, long pull gathering force, until now the stage lias been reached where sterling convertibility is a definite prospect. With sterling convertibility achieved, dollar repayment will become less difficult. I am pleased to note the indications of returning strength which are to be seen in Threadneedle-stret and on the international money market in London.
The Leader of the Opposition (Senator McKenna) adduced specific arguments against this loan, but I gained the impression, which I think was shared by other honorable senators on this side of the chamber, that he was battling very hard to rake up any arguments at all. He attempted to survey the whole field of the Australian economy, and whilst he opened up some interesting aspects, I do not think that it is necessary for me to reply to his general arguments at this stage. However, I warn the Senate that if I have an opportunity to speak on Supply I shall have something to say about the remarks of the Leader of the Opposition concerning the general position of the Australian economy.
In addition to criticizing the bill, the Leader of the Opposition referred in derogatory terms to the International Bank for Reconstruction and Development, in the course of which he made the remarkable statement that the bank holds its clients down. He also criticized its interest charges on the ground that they are unreasonable. It seems to me that the honorable senator, in this instance, as in so many others, has come pathetically late to that conclusion. He was a member of the government which made this country a member nation of the bank, the articles of agreement of which provide specifically that the rate of interest to be charged shall include 1 per cent, for the provision of capital reserves.’ I presume that the honorable senator agreed that this country should become a member nation of the bank. Did he then raise the objection that it might hold its customers down? I suggest that although he, when a member of the Government, was agreeable to Australia becoming a member of the bank, now, for purely political reasons, he seeks to criticize the bank.
The Leader of the Opposition also referred to the f per cent, commitment charge which the bank makes. I submit that that charge is a very reasonable one. It is the obligation of the bank to have on hand money which has been committed to loan to member nations. Surely it is reasonable that a charge should be made in respect of the amount undrawn. After all, that is normal banking practice. We in Australia enjoy what is known as the overdraft system under which we pay interest on the amount outstanding day by day. However, in England and in most continental countries interest is paid on the full bank loan. For instance, if the Leader of the Opposition went to a bank in London and borrowed £1,000, he would be obliged to pay interest on the total amount of the loan from the date on which it was made, even though he might not withdraw any of it for a considerable time. The International Bank for Reconstruction and Development has adopted that principle.
Senator O’Flaherty referred to the danger of a fluctuation in the exchange rate. I acknowledge at once that such a danger always remains, and I do not know how it can possibly be eliminated. However, I suggest that this country could protect itself against such a danger by producing and exporting to the maximum of its ability. By that means, the possibility of a violent fluctuation in the exchange rate could be lessened considerably.
I support this bill with some enthusiasm. To my mind, it indicates the continuing confidence of the International Bank for Reconstruction and Development in the economy of this country. The bank would not lend money to a country which was going downhill economically, although the Leader of the Opposition apparently thinks that it would do so. As honorable senators may be aware, the bank sent to Australia some of its officers to report on the economic condition of the country. Had our economy been unsound, the bank would not have lent us money. The fact that the loans are being made is a glowing tribute to the administration of the Menzies Government. I agree with honorable senators opposite that the greatest wisdom and caution should be exercised in the expenditure of loan moneys. As I said earlier, such moneys, when unwisely spent, can become a great drag on a country’s economy. However, I am assured by the remarkable record of achievement of this Government and, being so assured, I look forward to the future use of this money with the greatest confidence.
– In a broadcast address which the Prime Minister (Mr. Menzies) made last month, the right honorable gentleman referred specifically to this proposed loan in the following terms : -
The imports to be financed from the proceeds of this loan include agricultural, forestry, electrical, generating and transport equipment, in addition to a wide range of engineering and other plant for industrial development.
I agree entirely with Senator O’Flaherty that all of this equipment and plant could be manufactured in Australia. The arguments which I have heard this afternoon which suggest that that is not so are like those I heard when I was privileged to be a member of the Curtin Government and, later, the Chifley Government as Minister for Aircraft Production. It was said at that time that we could not manufacture engines for aeroplanes. Nevertheless, they were manufactured. It was said that we could not manufacture a fighter aircraft, but that also was done. I could give numerous instances to prove my contention that we have in Australia the brains and the ability to do what can be done in any other country of the world, provided that we are prepared to take the initiative and give the workers, particularly the technical workers, an opportunity to prove their worth.
In 1942, Australia did not have a fighter aircraft, and it was suggested that we should commence to manufacture such machines. The experts abroad said that it could not be done, but it was done. The Wirraway was improvised, and the Boomerang was produced in record time. Early in 1943 the design was on the drawing board. In July of the same year the aircraft was in the air. In overseas countries it was the practice to take approximately two years from the blueprint stage until the time when a machine was in the air. I could cite dozens of instances in which the Australian workers performed such feats. Senator O’Flaherty asked why, if this work can be performed in Australia, it is not being done. The answer should bc perfectly obvious. The technique of this Government and of all governments opposed to the Labour movement is to establish an unpayable national debt, as a result of which private investors are the creditors, so that some of them draw interest in perpetuity. It is beyond dc uht that the heaviest and most intricate machinery could be manufactured in this country.
Borrowing from America is a different proposition from borrowing from Great Britain. Most loans from Great Britain in the past have been on a more satisfactory basis. Surely honorable senators opposite have not forgotten the 1946 Loan of between £700,000,000 and £800,000,000 from America by Great Britain.
Sitting suspended from 5.45 to 8 p.m.
– In 1946, the United States of America granted a loan to the United Kingdom. Before the loan negotiations were completed, and just after the cessation of hostilities in 1945, the representatives of the United States of America ended the lend-lease agreement which had operated so successfully during the war years. It was successful from the point of view of all the allies. It was ended by the United States of America without consultation with its allies and, in consequence, Great Britain and its allies found themselves in a desperate position because the war had impoverished them. It had not adversely affected America. In the two world wars, the United States of America became the world’s richest nation. It prospered enormously. The ending of the lend-lease agreement meant that Great Britain had to have some assistance and it was granted a loan under the most humiliating conditions. As a result of it, America virtually directed the policy of the United Kingdom without consultation or agreement. Just after the loan was granted, control of prices was abolished in the United States of America. That meant eventually that the purchasing power of the loan to Great Britain was reduced by 25 per cent, because of the immediate increase of prices.
Those are the people with whom this Government proposes to deal. All that f have said can be verified by an examination of responsible publications, including the Manchester Guardian, which stated in January, 1946, that, for all practical purposes, certain members of the
United States Congress were gangsters as a result of the treatment they had meted out to Great Britain. Lord Keynes, who represented the United Kingdom in the- negotiations- for the loan, died as a result of the strain. That is the America that is eulogized by the Minister for National Development (Senator Spooner) and his colleagues. I am not referring to the American people. I am speaking of the American private bankers and the American imperialists, asthey describe themselves.
According to the Government, the loan, will be completed. Honorable senatorshave been told that certain purchases will be made but they have not been told the prices that will be paid. If effect is to be given to this policy in Australia, as it was in the case of the United Kingdom, Australia will have to pay much more for the engineering equipment and plant that it is to get in the United States of America than it would have to pay in England or to manufacture them in Australia. Financially, the two world wars have been a colossal success for the American imperialists and bankers, but they have meant bankruptcy for England and other allied countries. There is no let-up. As a strictly business proposition, if we examine the extent to which the United States of America benefited as a result, of the two world wars, and particularly World War II., and the extent to which the United Kingdom and other allies were impoverished, America might very well grant all the assistance requested interest free or free of loan. Lord Keynes, in 1945, suggested that the United States of America should make a gift, considering the sacrifices that England had made, but nothing was done.
I direct the attention of honorable senators to another aspect of this loan and other overseas loans. In such cases, interest is not taxed. We tax the interest earned by creditors in Australia, but do not tax the interest that goes to overseas creditors. That means additional profit to those overseas, all of which is made in this country. To all intents and purposes, Australia is being manoeuvred into a position similar to that which existed in 1926 when Viscount Bruce was Prime Minister. The American overlords will then attempt to determine Australian policy. Yet representatives of the ‘Government meekly acquiesce and practically grovel at the feet of their American overlords. Much more interest is being taken in this loan than the Government realizes. I quote the following extract from a leading article that was published in the Melbourne Age on the 9th April as an example : -
The decade after the first world war was a period of development. It is also recalled as a time of borrowings abroad at a rate that proved excessive in relation to national growth and external earnings susceptible to violent fluctuations,
The liabilities so created were a grave aggravation of the hardships and sufferings caused by the catastrophic fall of prices at the onset of the depression in 1929. Interest and sinking fund charges had to be punctually met, to keep faith with investors overseas. With wool at l)d. a pound and wheat at 2s. 3d. a bushel, this inescapable obligation was perhaps the most painful aspect of the 1930-32 crisis.
If it were not for the fact that we had to vote such a large part of shrunken export earnings to servicing the external debt the deprivations which all had to share would have been much less severe. The failure to borrow to the limit of our domestic resources, combined with a too easy reliance on London and New York markets till our credit was exhausted, brought drastic penalties and harsh sacrifices, by which alone the country was retrieved from bankruptcy.
That is the position into which the Government is driving Australia now. Unless the unforeseen happens, the disaster will be worse than it was twenty years ago. The statements that I have read were not made by a Labour supporter but appeared in the Melbourne Age, which supports the Government. It was a warning to the Government, but Government supporters are not prepared to take notice of anybody.
For reasons that I have mentioned previously, national debts are deliberately created and are made practically unpayable so that the debtors will be committed to pay perpetual tribute. Creditors who issue overseas loans arc paid much more than they lend, and ultimately they become the cause of economic crisis in the debtor country. That has happened in the past and must continue in the future. Authoritative and reliable publications give an idea of the extent to which debtor countries have been impoverished as a result of overseas loans.
I direct the attention of honorable senators to the position of the State railways. Capital expenditure on the Victorian railways has been no more than £90,000,000 to £100,000,000, but interest payments have totalled £152,000,000 and the principal is still owing. Other State railways, particularly New South “Wales, are in a similar position. The railways are becoming obsolete. They have been paid for again and again and still the States have to continue paying. Those are the terms under which this Government will borrow 54,000,000 dollars. It will involve Australia in perpetual payment. Posterity is to be bora into debt and poverty and will die in debt and poverty, as generations have done in other countries, and all this will happen with ‘ the blessing of the Menzies-Fadden Government. For treachery on the battlefield, the penalty is death. Those who are guilty of treachery in the political field are elevated.
Two-thirds of the revenue of the State railways goes to pay interest. That cannot last indefinitely. Ultimately, a climax will be reached. “Why should this Government allow Australia to reach such n stage ? “Why not approach the matter more intelligently ? That is within the bound? of practical politics, but this Government is not prepared to do it. All that the United States of America is doing through the International Bank for Reconstruction and Development is exporting American unemployment. Statements in journals such as the Financial Review in this country, and the Statesman and the London Economist in Great Britain, indicate quite clearly that at present America is facing a colossal accumulation of unsaleable consumer and capital goods. Something has to be done about it. Unless those surpluses can be disposed of, a serious problem will arise in America. If they are disposed of to other countries and paid for by loan moneys the trouble is transferred to those other countries. Apparently the position is not understood by honorable senators opposite nor is it being studied by them. The Government proposes to permit present trends to continue just as governments of a similar political complexion did in the late 1920’s. Thousands will be reduced to the breadline in Australia. In fact, .thousands have already been reduced to the breadline. For instance the Melbourne Herald has admitted that an exhaustive survey occupying six months by the Brotherhood of St. Lawrence has revealed that the slum population of Melbourne and suburbs is greater than it has ever been since 1937. That applies generally to the entire State of Victoria. What is the Government doing about it? The position will not be improved by dollar loans. The Government could better direct its efforts to bolstering our secondary and primary industries so that the purchasing power of working people will be increased sufficiently to enable them to enjoy a reasonable standard of living. That is all that can ‘be done. No drastic change is required. All that is needed is a reasonable balanced approach to the situation; but so far that has been entirely lacking on the part of honorable senators opposite.
The Minister sought in his secondreading speech to convince us that because a loan is being obtained from the United States of America everything here will prosper. The reverse will happen as it happened after the 1914-18 war. The only thing that prevented a depression after the 1939-45 war was the outbreak of hostilities in Korea. That enabled the participating countries to absorb their surplus goods and man-power. War-time preparations and luxury production are the two main props of the economy of the United States of America and other countries. Australia is for all practical purposes a virgin country. In the early days of American nationhood it imported the best brains of Europe. The result was vast progress industrially, but eventually those people reduced the United States of America to the social level of the countries from which they had come. The United States of America to-day has a migratory population of about 5,000,000. These people have no permanent homes and no permanent employment. Primary production has been mechanized and the result is this huge floating population. A former secretary of the Departmest of the Interior, Mr. Harold L. Ickes, said in 1947 that the only difference between the serfs in the United States of America at that time and the medieval serfs of England was that the serfs of feudal times wore iron collars. Obviously the United States of America is a country that cannot provide for its own unemployed. What can the United States of America do for us that we cannot do for ourselves? As sure as the sun will rise to-morrow, we are faced with a world depression, probably originating in the United States of America and spreading to this country.
I shall read for the information of honorable senators a paragraph published in the Management N Newsletter, a business publication circulating in Sydney, dated the 1st April. It stated -
America will start dumping her surplus of farm products on world markets in early July. Canberra authorities no longer have any doubt of this, and they forecast that “dumping” will assume the cloak of extensive commodity aid instead of dollar aid. Straight-out dollar aid will be curtailed. Wheat, dairy produce and cotton, particularly, will be unloaded.
When that is done, prices will drop disastrously and it will mean the end of our export trade. And what the Management Newsletter says of consumer goods will also be true of capital goods. Reports from Canada indicate that already the engineering industries of that country, including the great motor car industry, are lagging. Trade is declining. We are being led up the garden path by America. This policy of increasing the public debt in the interests of private investors can only have one end. Here I should like to make a quotation from The Evolution of Banking, by Robert H. Howe. At page 46, the author quotes the following passage from Science of Wealth, by Walker :-
No large national debt has ever been paid or in any way discharged, except by repudiation. The debt of the old French monarchy was wiped out with the “ assignats “. The debt incurred in the American Revolution vanished in “ worthless continental money “. The present debts of England, France, Austria, and other European countries are so large, the constantly increasing demand for more extensive and costlyarmaments so pressing, so absolutely overwhelming, that the hope of any payment of the principal cannot be reasonably indulged.
That was written in 1915, and the forecast proved accurate. Public debts were repudiated in many countries, including Germany and Austria, and they will he repudiated here unless a more reasonable approach is made to this problem. Repudiation means control by the creditor’s military forces. That is virtually the position in Great Britain to-day. In that country there are 50,000 American service personnel on about 34 air bases, and they enjoy extra territorial rights. So it is in Germany, Italy, Turkey, Greece and some Asian countries, and so it will be in Spain. If we reach the stage in this country where we cannot pay our debts, America will attempt to take charge of Australia and honorable senators opposite will have to admit to the people that they were either ignorant or neglectful of their duty when they allowed the Australian people to be placed in such an intolerable position.
– Not one Opposition speaker in this debate has told us how Labour would provide funds for developmental purpose. should there be a change of government. I rise to support this measure believing that we as a young nation have to go ahead with development just as other young countries had to do years ago. As Senator Paltridge said at the beginning of his speech, we are getting this money from the very country which started its developmental programme by borrowing all the money that it could from other nations. I repeat that Labour spokesmen have not offered one constructive suggestion in relation to Australia’s development. They have told us they will oppose this bill, but that is as far as they have gone. Senator 0’Flaherty and some of his colleagues have said that our interest bill will be so terrific that we shall not be able to meet it. I remind those honorable senators that the money is to be used to buy essential goods for developmental purposes. For instance, the agricultural equipment will include tractors. Those machines will increase our production.
– What about those that are made in Australia?
– None of the tractors we are importing from America could be made in Australia.
– What about the Chamberlain tractor ?
– I am talking about crawler tractors. The land in the southwest of Western Australia can be cleared only by crawler tractors imported from America. They are not made in Australia. The Chamberlain tractor is a wheeled tractor. We do not use wheeled tractors for clearing purposes. We use caterpillar tractors, purchased from America with dollars made available to us under loans of this kind. The Chamberlain tractor is quite a good vehicle. It is made in Western Australia, and for that reason, amongst others, I commend it. For its purpose, ii is an excellent machine, but for largescale development involving the clearing of extensive areas we must use track-type tractors. Vehicles of that kind are being brought to Australia as a result of the raising of these loans.
It is a fact that we are committed to pay interest on the loans, but I remind the Senate that when equipment has been brought to Australia from America it is put to work immediately and begins to create assets here. There has never been a developmental programme in Western Australia larger than the one that is being implemented at present. I venture to say that that programme could not have been undertaken unless this Government, by securing dollars from America, had enabled us to buy equipment to clear extensive areas of land. I ask the Opposition to consider the position that; obtained when this Government took office in 1949. At that time, Australia was producing each year 4,000,000 tons of coal less than it required. This Government set out to increase coal production. We thought the only way to do so was to obtain dollars with which to buy equipment to mechanize our coal mines. Before we negotiated a dollar loan, we imported coal from India and subsidized it to the degree of £2,000,000 or £3,000,000. Then the Prime Minister (Mr. Menzies) went, to America and negotiated a loan of 100,000,000 dollars. With that money, we bought the machinery necessary for the mechanization of our coal mines. To-day, instead of being- importers of coal, we are exporters.
Let lis examine the record of the Commonwealth Railways. In 1949, they made a loss of £500,000, and in 1951, a loss of £162,000. In 1952, after dieselelectric locomotives had been introduced, they made a profit of £50,000. The profit last year was £60,000, and I have been told it will be larger this year. That is the result of the action of this Government in going to the International Bank for Reconstruction and Development and borrowing dollars with which to buy heavy diesel-electric locomotives. I was hoping honorable senators opposite would ask why we did not buy locomotives from sterling area countries. The reason is that, having made inquiries, we found they were unobtainable from any country other than America. Light diesel-electric locomotives made in England are in operation on the South Australian Railways now, but the British manufacturers took over two and a half years to deliver them. England does not make, even to-day, the heavy diesel-electric locomotives that we are using on the Commonwealth railway system.
If we want to develop this country, we must go outside Australia to get the money we require. If a small farmer wants to develop his farm, he borrows money from his bank. I should say that 90 per cent, of the farms in Australia have been developed with money borrowed from financial institutions. If a man has a property of 2,000 acres, only 200 or 800 acres of which have been cleared, and he can borrow money at 5 per cent, interest from his bank to enable him to clear another 500 acres, the return from that investment will be far greater than the interest charges on the loan, if the money is spent in the right way. The loan Ave are discussing to-night is a loan for the development of Australia. Under the agreement relating to the last dollar loan, no money could be used for the purchase of machinery for the development of our forests and our saw-milling industry, but on this occasion a sum of money has been set aside for the procurement of machinery for those purposes. After the last loan had been negotiated, many “Western Australian sawmillers approached me and other members of the Parliament. They wanted to know why they could not buy machinery from America for the development of their sawmilling operations. When we pointed out to them that no provision had been made for any of the money to be used for that purpose, they asked us to ensure, if further loans were raised from the International Bank, that provision would be made for forestry and saw-milling. I am pleased that in the agreement relating to this loan provision has been made for those industries. I suppose we in Western Australia mill some of theheaviest timber that is milled in this country. Heavy equipment is required to handle it. That equipment is procurable only from America, and, therefore, only under a dollar loan. I am certainthe sawmillers will be pleased to learn that, under the provisions of this agreement, they will be permitted to buy from America the equipment they require.
Members of the Opposition do not appear to understand that some of the machinery made in America cannot be obtained from sterling countries. If honorable senators opposite go to Kwinana and look at some of the heavy equipment in use there, they will discover that it cannot be obtained from any source other than America. When I was at Kwinana recently, I saw heavy caterpillar tractors shifting piles from place to place. Each tractor carried a pile on one side, with a weight on the other side to balance the load. I had never seen tractors of that type before, and I was told they could be procured only from America. Prior to the raising of dollar loans in America by this Government, the people of Australia, especially those in the eastern States,, suffered from frequent electricity blackouts. Our generating stations were, so to speak, out of gear. New power stations were erected in Western Australia, and some of the equipment installed in them was bought with dollars borrowed from America. There are no blackouts in this country to-day. Not very long ago, practically every commercial and industrial establishment in Perth had an auxiliary generating plant for use in the event of a power failure, but now all those establishments are putting their auxiliary power plants on the market for sale. It cannot be denied that until fairly recently nobody in Australia knew whether there would be a blackout one night or the next night, but our difficulties have been overcome so successfully that people in Western Australia are selling their auxiliary power plants.
I do not know why honorable senators opposite intend to carry their opposition to this measure to the degree of voting against it. I believe that, by borrowing this money and using it to buy from abroad the equipment we need to develop this nation, we are creating more employment in Australia. We had a Senate election about ten months ago. During the election campaign, the Leader of the Opposition (Senator McKenna) and other members of the Opposition went through the country telling the electors that this Government was endeavouring to create unemployment in Australia so that it could look after the capitalists and bring the workers to heel. I do not blame them, because they thought that they could get away with it. Many honorable senators opposite stated that this Government would cause tremendous unemployment. The election was held, and the Australian Labour party, by lies, managed to. achieve victory in some States, but we still hold the Senate, and we will continue to hold it because the lies have been thrown back in their faces. There has been no depression, and the unemployment that we were supposed to be creating did not eventuate. I know that the members of the Australian Labour party are very honest people and that, during the forthcoming election campaign they will, from the public platform, tell the electors that they made a mistake. Perhaps !
I am very pleased that, under the first schedule to the bill, a proportion of the loan moneys will be utilized for the development’ of irrigation in Australia. In the future, water conservation is destined to play an increasingly important part in the development of this country. Western Australia, except in the southwest corner, is one of our driest States. About 90 per cent, of the water that falls from Heaven over that State is allowed to run into the sea. The purchase overseas of heavy equipment, which this loan will make possible, will enable steps to be taken to conserve great quantities of the water that now flows to waste. I am referring not to big irrigation systems, such as the one that will be established under the Snowy Mountains project, but rather to small irrigation systems to serve farms in the south-western part of Australia. I believe that, by the damming of small gulleys and the use of the sprinkler system of spray irrigation, large areas of land in the south-western corner of this country will be developed, and that we shall derive a handsome return for the money so expended. I recently visited Northcliffe, in the south-west of Western Australia, where settlers under the war service land settlement scheme are endeavouring to grow tobacco. Under the terms of the scheme they were each granted about 100 acres, on condition that about 30 acres were cleared and 10 acres of the clearing planted with tobacco. The settlers planted tobacco where the board told them to plant it, but now there are left only ten or twelve of the original 24 soldier settlers, because when the time came for the plants to mature it was found that about nine.tenths of the area was too dry; consequently, the crops were failures. It is imperative for us to look after the remaining soldier settlers in that area. That can best be done by the establishment of irrigation systems. Irrigation can also play a big part in the north of Australia, particularly in the north-west, where all the big rivers flow into the sea. Only by the development of the north-west can we encourage settlement there. The Labour party has not suggested any way in which to further the development of this country, which to-day is in a perilous condition. Millions of people in the countries to the north of Australia have greedy eyes on our’ country, and unless we develop and populate our open spaces quickly we may experience difficulty in holding them. I believe that we should borrow sterling, dollars, or any other currency in order to buy the equipment that we need to develop our country fully. I have much pleasure in supporting the bill.
. I never expected that we would see in this Senate the spectacle of a man who, although living in the twentieth century, is thinking in terms of the nineteenth century. He sought to create the impression that the development of Australia had only just begun. The honorable senator should inform his mind on the great development that has taken place in this country. He stated that members of the Australian Labour party had made no suggestions in the matter. One would imagine from his remarks that Australia is still a primitive country. I was astounded by the specious arguments that were advanced by the Minister for National Development (Senator Spooner) and other members of the Government, in support of the borrowing of dollars from the “United States of America. Although I am opposed to borrowing money from that country, I should- not like it to be imagined that I am opposed to America. It is a very important country, which has contributed greatly to the development of industry. The Minister’s second-reading speech contained a sugar-coated but bitter pill. In the early stages, Australia was forced to borrow money overseas in order to carry out developmental projects. I concede, readily, that in the days before manufacturing techniques were developed in Australia, it was necessary for us to import machinery and goods, but that day has long since passed. We are now capable of producing all the machinery that we need.
Prior to the suspension of the sitting, Senator Cameron, who was the Ministerincharge of Aircraft Production in the previous Labour Government, reminded the Senate that after the fall of Dunkirk during World War II. he was faced with the necessity to utilize fully the resources of this country in order to prosecute its war effort. The construction of fighter aircraft here was not undertaken until comparatively recent times. I recall that some years prior to World War II. the government of the day offered to pay a bonus to any firm that undertook the manufacture of a motor car, or even a motor engine, in Australia. Up to that time, the manufacture of such articles had not been embarked upon, because there were not in this country men with the requisite technical knowledge. What a contrast to-day!
The Minister stated that a relatively large proportion of the dollar loan would be utilized for the development of the agricultural industry. It has been amply demonstrated that Australia is now able to produce all of the agricultural machinery needed in this country. Not so very long ago, many farmers possessed only primitive machinery, and it was necessary to import Massey-Harris reapers and binders from the United States of America. There is no necessity to do so to-day, because the Sunshine harvester, a product of Australian technicians, is readily available. Furthermore, headers and all other kinds of machinery used in the primary producing industries are manufactured in Australia. Why, then, is it necessary for us to borrow dollars from the United States of America, with which to purchase agricultural implements from overseas for the development of our primary industries? Prior to World War II., Army tanks were not manufactured in this country. During the war period, however, Australian technicians produced tanks the equal of any produced by other countries.
It is not so very long ago that ships could not be built in Australia, and we had to buy them from overseas. To-day, Australian-built ships are as good as ships built in any other part of the world. Only in comparatively recent times has the manufacture of railway rolling stock been undertaken in this country. Prior to the advent of the diesel-electric locomotive, some of the most efficient locomotives in use by our railway systems were constructed in the Victorian railway workshops. Who is to say that, given the opportunity, Australians could not manufacture a diesel engine equal to any that is imported into this country? There are comparatively few diesel engines ob our railways in comparison with the number of steam- engines that are still running. It is true that as a result of the inability of the railways to repair their engines and rolling-stock during the war they were left with inefficient equipment at the end of the war and it was necessary to purchase new rollingstock from abroad. But had it not been for the war and the dislocation of our industry, our railway workshops would have been able to produce all the rollingstock that the railways required.
At one time, it was suggested that it was impossible for Australian technicians to produce textiles and manufacture all the clothing required by this country. Such items were imported from abroad. We all know what happened in the 1930’i as a. result. Because we had had the idea that Australian technicians and industrialists could not meet our requirements, and because we therefore resorted to importation on a large scale there was a fall in the price of our goods and we were left stranded. As a result of the application of the tariff by the Labour Government, led by the late Mr. Scullin in that very serious period of Australian history, Australia began to produce the goods that it required. Since the introduction of the Scullin tariff enabled the development of our secondary industries, it has not been necessary for this country to borrow a brass farthing abroad. Now, surely but slowly, the present Government i3 developing the habit of overseas borrowing. I regret very much that in the course of his speech on this bill Senator Paltridge said that his party believed that it was necessary to borrow abroad in order to develop this country. I also regret that, in the course of his second-reading speech, the Minister for National Development (Senator Spooner) said that the Government believed that it was necessary to borrow abroad in order to stimulate industry in this country. We have before us the example of what was accomplished during the war. Munitions were not manufactured in Australia in any great quantity before dire necessity compelled us to make them. In view of the fact that we have been able to finance, not only the war, but the great work of reconstruction since the war without obtaining funds on foreign markets, surely if this country applied itself to overcoming any difficulties that stand in the way of its development it could do so.
– Why did the Labour Government join the International Bank?
– Because, when the bank was founded just after the war, it was thought that it might be able to assist Australia. But just because a nation assists in the establishment of an international bank there is no necessity for that nation to borrow from it. Any wise government that is planning its financial arrangements ahead must realize that it may possibly require a loan at some future date and must make provision for that contingency. But it is not compelled to borrow just because it has made those arrangements. At the moment there is no necessity for Australia to borrow from “abroad. We can supply all our own needs. I opposed the last dollar loan. During the debate on the legislation that was introduced for the purpose of sanctioning that loan I drew attention to the fact that, as a result of the previous dollar loan Australia, particularly Victoria, spent vast sums of money in importing equipment for the generation of electricity. Senator Scott mentioned the urgent necessity for the importation of equipment for the generation of electricity; yet the machinery that was imported as a result of the last dollar loan is still lying idle, rusting in the Latrobe Valley in Victoria.
– That is because Mr. Cain would not use it.
– No. It is be,cause the Menzies Government would not make available the funds required to put it into use. However, it is not American dollars or Swiss money that are really required but a few good Australian pounds with which to pay Australian workmen to manufacture our requirements.
In the course of his second-reading speech the Minister for National Development did not mention any purpose to which this loan would be put which was of such urgency that we should again pledge the credit of this country abroad. Immediately this agreement is signed on the 1st May, interest must be paid on the full amount of the loan, regardless of how long it is before the money is used. In addition, we must pay interest for three years before we can start to repay any of the principal. Is that good business ? Is that the sort of finance that will make this country prosperous? If the Government wishes to remedy the shortage of dollars why does it not propose to the dollar countries that they should purchase Australian goods? If we had a surplus of dollars as the result of trade between the United States of America and Australia we could obtain equipment from that country without detriment to ourselves. We have been trading with the Japanese despite the fact that the Japanese incurred the lasting enmity of Australia by their behaviour during the war. We have been told that notwithstanding our dislike of the Japanese we must trade with them because they purchase the commodities that we produce. If the United States of America were to purchase enough of our wool and wheat to give us a favorable trade balance we could with a clear -conscience accept the diesel engines that we need from that country. But in view of what happened to Australia previously because a government of a political complexion similar to that of the present Government borrowed money and continued to borrow until our credit was destroyed,” we should be careful of what we do now.
At the beginning of his second-reading speech the Minister for National Development said that the purpose of the bill was to authorize the borrowing of 54,000,000 dollars from the International Bank for Reconstruction and Development. That sentence indicated that the Government was seeking the permission of Parliament to borrow the sum mentioned. But in his next sentence the Minister said that the loan was to be made in accordance with an agreement concluded with the bank on the 2nd March. In other words, the Parliament is confronted with a fait accompli. The Government is not really asking the authority of the elected representatives of the people to take this action. On the opposite side of the chamber, the Government has faithful followers who are. living in the twentieth century with nineteenth century minds and they will support this measure blindly. They might have spoken against it in their party meetings, but if so, that is not apparent in this chamber. So the Opposition, in order to bring home to the people of Australia the dangerous road that the Government is taking, is compelled to vote against this proposition. Remembering the tribulations of our country during the 1930’s, we would be playing false to the people of Australia if we opposed the passing of this bill merely by words. This demands a vote to be taken on the floor of the Senate. Let us declare to the people that we, as the Opposition, have done all that we possibly can to prevent the Government from embarking once again on the dangerous course of pledging the resources of our country to overseas borrowers.
I was present in the House of Commons during the debate on the Bretton “Woods Agreement, and heard several honorable members of the House rise in their places and attempt to direct the attention of the people of the United Kingdom to the frightful price which the country was paying for the loan that was then about to be guaranteed. They pointed out how rapidly dollars were vanishing because of the manipulation of the dollar market. At that time, Great Britain had just come through the awful travail of war, and it was necessary to do something to rehabilitate the country. I remember that one speaker dramatically said to the government, “ You have sold the British Empire for a packet of cigarettes “, a statement which had a profound effect on other members of the House. In what was once the greatest nation of the world, there are now foreign troops, whether they be American or otherwise. That indicates how far we have drifted.
The ACTING DEPUTY PRESIDENT (Senator Mccallum).- Order! I cannot see any relation between the presence of foreign troops in England and this bill.
– I hope that the action of this Government in pledging our resources overseas will not bring about a similar state of affairs in this country. I oppose the bill, and I hope that every honorable senator will vote against it.
– I suggest that the evidence against this loan has been supplied by honorable senators opposite, particularly the Minister for National Development (Senator Spooner). In the course of the Minister’s second-reading speech, he stated -
The Government has always believed that a measure of external financial assistance is essential to permit a satisfactory rate of development of Australia’s economic resources
That statement is in line with the claim, made by the Minister in this chamber not so long ago, that Australia could not be developed without the assistance of foreign finance. A similar statement was made this afternoon by Senator Paltridge. The Minister continued -
To obtain additional dollars to pay for equipment needed for the expansion of Australian industries, the Government embarked upon a programme of dollar borrowing more than three years ago. This- has been supplemented by our recent borrowing of Swiss francs and by the continuing inflow of private sterling and other oversea capital.
Let me deal first with the Swiss francs loan. In effect, the Treasurer (Sir Arthur Fadden) hawked the credit of this country all round the world. First he took it to the United States of America, then to the United Kingdom, and finally to Europe, where he was able to mortgage it to Switzerland.
The ACTING DEPUTY PRESIDENT. Order ! I think it would bc better if the honorable- senator left those remarks until the other bill is before the Senate.
– I am sorry, Mr. Acting Deputy President, but I point out that the Minister referred to these matters in his second-reading speech.
The ACTING DEPUTY PRESIDENT. - That may be so, but I was not in the chair at the time.
– I shall content myself by saying that the credit of this country was dealt a severe blow by being hawked round the world and mortgaged for a miserable £6,000,000’ worth of Swiss francs.
The argument advanced by honorable senators opposite that the machinery and equipment to be purchased with theaid of this loan cannot be produced or purchased in countries other than those in the dollar area,, is fallacious. The Minister, in his second-reading speech, has provided plain evidence that such equipment can be produced, and is being produced at the moment, in other parts of the world which are not in the dollar area. In outlining the way in which the previous 150,000,000 dollar loans had been used, the Minister stated -
Of the 150,000,000 dollars provided under our first and second loans, more than 45,000,000 dollars, or almost one-third, havebeen allocated to the purchase of tractors and agricultural- machinery for the opening up of new lands and for the adoption of more efficient farming techniques on existing farms. Recent marked improvements in productivity in our primary industries have undoubtedly been due, in no small measure, to the increased supply of modern American farming equipment . . .
That statement is partly true,, but the Minister overlooked the important part which increased supplies of superphosphate have played in increasing primary production. As honorable senators are aware, during the war years there was a grave shortage of superphosphate owing to the fact that our main source of supply, Nauru, hadbeen bombed out of existence: The Labour Government of that day tried to obtain supplies from other countries- in order to carry on essential food production. During the period of the shortage, thousands of acres of agricultural land throughout Australia were starved of fertilizer and, as. a consequence, greatly deteriorated. That shortage continued into the post-war years, and it was not until approximately five years after the end of the war that adequate supplies of superphosphate became available. Ir is a well-known fact that land does not respond immediately to the application of fertilizer; it is not until a year or so has elapsed that beneficial results begin to make themselves noticeable. During the last few years, primary production has increased because of the availability of adequate supplies of superphosphate, so that it is quite wrong for this Government to attempt to take all the credit for the increased primary production. That increase is due, in large part, to action taken by the previous Labour Government.
I am not satisfied that the machinery to be purchased with these dollars is not available in non-dollar areas. Later in the Minister’s second-reading speech, he stated -
Import licences worth more than 13,000,000 dollars have been issued under the second’ loan for heavy road transport vehicles . . .
Since when have British and Australian manufacturers been unable to manufacture heavy transport vehicles ? It is nonsense to say that British manufacturers, at least, could not turn out such equipment. The Minister continued -
The new loan of 54,000,000 dollars is for aperiod of fifteen years. Interest at 4) per cent, per annum - the same rate as- under our second loan- which, according to him, was a moderate rate of interest - is payable half-yearly on the amount of theloan withdrawn and outstanding from time to time . … .Repayments of principal do not commence until three years after signature, the first principal repayment falling due on the 1st March.. 1957. Payments of interest mid principal will then be made half-yearly in accordance with an amortization schedule on a fixed annuity basis. The final payment will fall due on the 1st March. ]!)(!!>. Once the full amount of the loan has been withdrawn, and. before amortization payments commence, interest will amount to 2,505,000 dollars or £A. 1,145,000 per annum. From 1057 onwards, annual payments of interest and principal combined will amount to 5.77S.OOO dollars or £A.2,580,000.
Those figures refer only to this loan of 54,000,000 dollars which we are considering. . If we take into account also the previous loans of 100,000,000 dollars and 50,000,000 dollars, making a total of 254,000,000 dollars, it will he found that the annual bill in respect of interest and sinking fund payments will be considerably more than’ 20,000,000 dollars. If, as the Minister has stated, these loans are to be negotiated over a period of five years, I suggest that the fifth loan will be only sufficient to pay the interest and sinking fund bill for the dollars already borrowed. The Government will have to borrow at least 50,000,000 dollars to pay interest and principal annually for two years. Then Australia will have to find more than 25,000,000 dollars annually from production to pay principal and interest on the 254,000,000 dollars that we still owe. Will the new machinery and equipment that is to be bought increase Australia’s productivity to the extent of 25,000.000 dollars so that the interest can be paid? I have grave doubts. What will happen if we strike a falling overseas market? If we do, Ave shall be in the same predicament as when a. Liberal government borrowed extensively overseas in the years preceding 1929-30. I nin bitterly opposed to overseas borrowing if it can be avoided because it will place an intolerable burden upon the Australian people.
The Minister for National Development contradicted himself and every other speaker on the Government side in his second-reading speech. It was claimed that the equipment that was to he bought could not be obtained outside the dollar area. In his second-reading speech, the Minister stated -
Once again, agriculture will receive a substantial, share of the total. Although much of the equipment needed to develop new areas and increase output from existing holdings can be obtained either from Australian manufacturers or from suppliers in countries outside the dollar area . . .
That is a clear admission by the Minister that the great bulk of the machinery could be secured from Australian and other manufacturers outside the dollar areas. That statement supports every argument that has been put forward by honorable senators on the Opposition side. In the same speech the Minister added -
Imports of electricity generating equipment, especially package power plants, financed under our first and second International Bank loans, together with generating plant obtained from the United Kingdom and Europe, have largely been successful in eliminating the acute peakload shortages which hampered production and caused so much inconvenience during the postwar years.
That is another clear admission that electrical equipment was available outside the dollar area although supporters of the Government claimed that it could not be obtained elsewhere. The Minister has shown clearly also that it has not been necessary to spend so much money on electrical equipment in the dollar area. He stated -
Although demand for electric power continues to expand, in future the bulk of the new generating equipment will be supplied from non-dollar sources. This explains the reduced allocation for electric power under the third loan.
A proportion of the dollar loan is to be allocated to the purchase of aircraft. Obviously Australia will obtain a fleet of planes that have been discarded by the big American airlines. We shall get secondhand aircraft probably seven years old. The Minister stated further -
The road transport programme for which an amount of 10,500,000 dollars has been tentatively allocated, includes not only the construction and maintenance of roads and bridges but also additions and replacements of our fleet of goods-carrying road vehicles. For the purposes of the third loan agreement, these have been redefined to include utilities on commercial chassis of 15 cwt. and over.
I invite honorable senators to analyse that statement. First, the Minister proposes to borrow dollars from the United States of America to repair Australian bridges. What special equipment does the Government require for that purpose ? Does the Minister seriously claim that the Government cannot obtain 15 cwt. utilities in any other country but America? Does he suggest that Australia could not carry on its bridge repair programme if he did not import 15 cwt. utilities from the United States of America? He should not insult the British manufacturers. It is no wonder that the British Government has been complaining of the treatment that has been meted out to British manufacturers by the Australian Government. Senator Laught claimed that the loan was required to develop the country, and he added -
How would Labour do it? Would Labour use the savings banks deposits or tax the people for it? There was no alternative but to buy dollars for the internal development of this country.
The Labour party would neither take the people’s savings nor tax them more heavily. It would simply restore the internal loan market to the strength it possessed when a Labour government was in office. That loan market was destroyed by this Government when it was returned to office. If the Government had not done so, it would not have to go overseas to borrow dollars for Australian development. It could have borrowed Australian pounds inside Australia from the people. They still have that money.
– “What would a Labour government do with the pounds?
– For what reason does the Government want dollars? Does it need them to repair bridges? Government supporters have said that it was necessary to bring dollars into Australia to finance works such as bridge repairs.
– The Minister said “ dollar goods “.
– He did not say “ dollar goods “. A Labour government would restore the loan market. It would not take the people’s savings, but would gain their confidence, just as it did when it was previously in office. It would borrow the money inside Australia. Government supporters have claimed that the Government could not develop Australia without foreign capital. Senator Paltridge said that a Labour government would develop Australia by resorting to the printing press.
– That is correct.
– The honorable senator should think before he speaks. In the post-war years up to 1949, the Labour Government redeemed treasury-bills to the value of £200,000,000. Then the LiberalAustralian Country party Government was returned to office. Three years ago, in one year, it used the printing press to produce £45,000,000 . for internal works. The following year it increased that amount in the same manner by £72,000,000. In the past year, it has wiped off £20,000,000 of that amount, but, in effect, it has used the printing press to produce £97,000,000. Government supporters should not charge the Labour Government with issuing credit in the face of that record.
Senator Paltridge also said that the Government wanted to be honest. It wanted to be Australian, and to promote the development of the country. He said it wanted to shoulder its responsibilities. I need give the honorable senator only one answer to those statements. “Who carried the responsibility of Australian administration in 1941 ? The Liberal party that occupies the treasury-bench to-day ran out on its responsibilities in 1941, and the task had to be shouldered by the Labour Government, which carried that responsibility until 1949. For the past three years supporters of the Labour party have had to sit on the Opposition side of the Parliament and watch the Government increase the note issue by nearly £100,000,000 in a time of prosperity.
Question put -
That the bill be now read a second time.
The Senate divided. (The President - Senator the Hots. A. M. McMullin.)
AYES: 20
NOES: 26
Majority . . . . 3
AYES
NOES
Question so resolved in the affirmative.
Bill read a second time, . and passed through its remaining stages without amendment or debate.
page 176
Debate resumed from the 12th April (vide page 105), on motion by Senator Spooner ) -
That the bill be now read a. second time.
– The purpose of this bill is to ratify a loan agreement; to borrow nearly 60,000,000 Swiss francs at 4 per cent, per annum, repayable in fifteen years, with the option of redemption at the end of twelve years. The loan, expressed in Australian currency, amounts to the insignificant sum of £6;000,000. The flotation and underwriting costs amount to ‘£200,000. It is worthy of note that that represents 3-^.- per cent, of the total loan. In other words, there is a discount of £3 6s. 8d. on the loan. This means that although we are paying interest at 4 >per .cent, on £A. 6,000,000, we .shall on effect receive only £5,800,000. Therefore the effective rate of interest is higher than 4 per cent. In view of the debate that has just ended on the Loan (International Bank for Reconstruction and Development) Bill I do not propose to develop at length my thoughts on the subject of overseas borrowing. I merely say that what I have already said about overseas borrowing, in the light of the present state of our economy, may also be applied to this measure. Once again I confess that I have a feeling of shame and embarrassment because of the fact that the Australian nation, which has an annual income of £3,500,000,000 and a Commonwealth Government revenue of £1,000,000,000 a year, should go on to the
Swiss market, not privately but pu’blicly, to borrow £6;000,000. We on ‘this side of the chamber consider that the ‘Government has lost its sense of Australia’s dignity as a nation when it seeks from another country a sum of money which is nothing more than petty cash. Bearing in mind the debacle on the London loan market when the Australian Government was able to raise only 56 per cent, or 57 per cent, of the total loan money required, one’s sense of propriety is offended when one sees the same Government going across the ‘Channel to Switzerland to borrow a paltry £6,000,000. What amazes me, however, is the joy with which the success of this venture has been hailed by the Government. Negotiations went on for two years. Swiss bankers came toAustralia to decide whether we were of good repute and credit-worthy to the extent of £6,000,000. Surely honorable senators must see something completely undignified and incongrous from the viewpoint of the Australian nation in that procedure. The Minister for National Development (Senator Spooner) said in his second-reading speech that the resultsof the loan should be regarded with much satisfaction by Australians. My own view is that Australians will be disgusted to think that the credit of the nation hashad to be .pledged to cover such a paltry loan.
– Australia could not have borrowed even that much when Labour was in power.
– We certainly would not have gone to Switzerland for such an insignificant sum. I remind thehonorable senator also that when Labour was in office it had no need to borrow overseas. We managed to finance a. major war effort entirely from our own resources. On the subject of the need for this money for development, the Swiss loan is a little different from the loan from the International Bank because the proceeds do not have to be directed to any particular purpose. At least we did not have to submit to .that indignity. The money is to be paid into a trust account and used to help to honour the Commonwealth’s promise to the States to support their loan programmes to the tune of £95,000,000. We are told that this £6,000,000 from Switzerland will be very helpful for that purpose. By all the indications that is quite wrong, because it is apparent from the financial trends of the moment that this Government will end the year with a vast surplus. In these circumstances it is completely incorrect for the Government to claim that it needs this £6,000,000 to enable it to fulfil its promise to the States. This loan seems to me to be an example of utter aberration on the part of the Government. It is an unnecessary pledging of credit which will do great damage to our prestige. One would think that we were some insignificant little republic in a remote part of the world instead of a great nation, walking into Europe to borrow £6,000,000. Yet I find the Minister for External Affairs (Mr. Casey) rejoicing as if some great feat had been achieved. He said -
Naturally the Swiss investigated our credit worthiness and the response in Switzerland to the loan must be a source of gratification to every thinking Australian.
Any honorable senator who considers what I have just said will see quite plainly that this Government has lost its sense of perspective. In this particular, as in others that I detailed earlier to-day, the Government’s action is damaging to our standing in the eyes of the world and no real benefit will accrue to this country. The loan will have to be repaid, probably at a time when the rate of exchange is adverse to Australia. The Treasurer (Sir Arthur Fadden) has admitted that possibility. He has also conceded that we may ultimately have to take a smaller amount as net proceeds of this loan. I deplore the fact that, if this loan had to be arranged, it was not arranged privately between the Commonwealth Bank and the Swiss banks. .Surely nothing more than a stroke of the pen by the Governor of the Commonwealth Bank on behalf of the board was needed to arrange such a loan. But apparently we are so credit-worthy in the eyes of the Swiss banks that they would not lend us this money themselves. The three banks that are parties to the agreement, have merely undertaken to underwrite the loan. The public of Switzerland was invited to subscribe this paltry sum. For the reasons that I advanced in my speech on the previous measure, we oppose this bill also and will vote against it. The fact that
I have spoken only briefly on this occasion does not mean that I and the other members of my party do not feel as strongly about it as we did about the other bill.
– I propose to confine my remarks to a few matters which’ have direct relevance to this measure. This loan is reminiscent of loans which this country enjoyed in the 1920’s. It is, in effect, a cash loan and it has a dual value. First, the borrowing of 58,000,000 Swiss francs will make that amount of currency available to the Commonwealth Bank for international traders. In other words, this amount of currency can be employed to relieve the strain on dollars or other scarce currencies. The second value of the loan lies in the fact that the Australian pounds which the Commonwealth Bank supplies in exchange for the francs wl! be used to finance the loan council works programme. For that reason I thought when I first looked at the bill that it would have a direct appeal to the Labour party which never endingly screams about the shortage of loan funds. Here is an opportunity to provide loan funds for State works, but we find that the measure is opposed by the Labour party. The Leader of the Opposition (Senator McKenna) has sneered at the loan. He said the sum was insignificant and that the loan would serve no good purpose. That is what may be described as a typically narrow Labour party view on overseas borrowing. The loan opens up a commercial avenue which does not now exist between Switzerland and Australia. In the world in which we live, commercial avenues are of extreme importance and will be of increasing value to this country as time goes on. I, for one, welcome the prospect of opening up a new avenue of trade and commerce with a country with which in the past we have not been able to do a great deal of business.
This afternoon, Senator McKenna criticized a rate of interest of 4$ per cent. He said it was too high. This is a loan negotiated at a rate of interest of 4 per cent. Let us be perfectly fair. If the underwriters’ commission is applied to the interest rate on the loan, it ‘means, in effect, that the rate that Australia will be required to pay is no more than 4^ per cent. In view of world conditions, I suggest that is not excessive. Senator McKenna, having criticized this afternoon an interest rate of 4f per cent., in fairness and -justice might have commended the Government for obtaining this loan at the low rate of 4^ per cent. The honorable senator has said he feels shame and embarrassment in respect of the raising of the loan, but I believe he will find himself again in a very small minority. I do not think the Australian people will feel any shame or embarrassment at the successful completion of this deal. I think they will regard it as a further extension of Australia’s opportunity to trade with other countries and will commend the Government for its action in this matter.
Question put -
That the bill be now read a second time.
The Senate divided. (The President? - Senator the Hon. A. M. McMullin.)
AYES: 31
NOES: 27
Majority . . . . 4
AYES
NOES
Question so resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
page 178
Motion (by Senator O’sullivan) agreed to -
That the Senate, at its rising, adjourn to’ to-morrow, at 11 a.m.
page 178
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
.- I move-
That the bill be now read a second time.
The main purpose of the bill is to provide an increase in the pensions payable under the Superannuation Act and to raise the maximum possible number of units of pension from 26 to 36. Since pensions were last increased in 1951, representations have been made to the Government on the inadequacy of the benefits. The matter has been considered by the Government, and it is proposed that the value of a unit of pension be increased from £39 per annum, or 15s. a week, to £45 10s. per annum, or 17s. 6d. a week. A corresponding increase in lump sum payments by a contributor to the Provident Account is provided for also. It is proposed that pensions payable in respect of children of deceased contributors be increased from 7s. 6d. to 10s. a week. Pensions for orphan children will be increased from 12s. 6d. to 15s. a week.
The proposals contained in the bill also affect the percentage that pension entitlement bears to salary. Under existing arrangements, for every £62 of salary up to a salary not exceeding £1,240 per annum, a contributor is entitled to elect for one unit of pension worth £39 per annum, or 15s. a week. The pension entitlement is, therefore, equivalent to approximately .63 per cent, of salary. Where the salary exceeds £1,240 per annum, for every £124 of salary in excess of £1,240 an employee may contribute for an additional unit of pension. It will be seen, therefore, that the higher the salary in excess of £1,240 per annum, the lower is the percentage that the pension entitlement bears to salary. On the highest salaries, the pension is as low as 24 per cent, of salary. It is proposed to adjust the unit of salary that attracts an additional unit of pension from £62 to £65, which, with the proposed increase in the value of the unit, will increase the maximum percentage of pension to salary from 63 to 70 per cent, on salaries not exceeding £1,300 per annum. On salaries exceeding £1,300 per annum, the salary unit above £1,300 will become £130, so that the maximum percentage of pension to salary will be reduced progressively from 70 per cent, as salaries rise above £1,300 per annum. On the highest salaries, the maximum percentage of salary that could be secured as pension would be rather less than 40 per cent.
Summarized the proposals are - (1) An increase of £6 10s. per annum, or 2s. 6d. a week, in the value of each unit of pension ; (2) an increase in the maximum pension entitlement of contributors from 63 per cent, to 70 per cent, of salary, but progressively declining in the higher ranges to 40 per cent.; (3) an increase of 2s. 6d. a week in the pensions payable for dependent children ; (4) an increase from 26 to 36 in the ceiling number of units.
A number of minor machinery amendments are included in the bill to provide for simplification of administration of the Superannuation Act. I propose to explain those provisions in detail when the bill is being dealt with in committee.
Debate (on motion by Senator Willesee) adjourned
page 179
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator O’sullivan) read a first time.
– I move -
That the bill be now read a second time.
The bill makes provision for increased rates of pension for members of the Permanent Defence Forces upon their retirement, and also for existing pensioners under the Defence Forces Retirement Benefits Act. As honorable senators are aware, that act provides that upon retirement from the Permanent Defence Forces, personnel became entitled to pension, or benefits by way of lump sum payments which are related to the period of their service, and to their rank on retirement after attaining retiring age, or, in the case of those discharged on medical grounds, to their incapacity in relation to civilian employment. The act also provides for pensions to be paid to the widow and children of a member or pensioner.
The principal act came into operation in July, 1948, and certain increases in the rates of pension then payable, so that they would accord more closely to the cost of living index, were provided by amending acts in 1950, 1951 and 1952.
The broad effect.of the bill is to increase by one-sixth the rates of pension at present provided for existing and future pensioners, whether they be members retired through invalidity or on the attainment of the maximum age for their rank. For widows, pensions will be increased by the same proportion. For children, pensions will be increased by £6 10s. per annum. All these increases will be effective from the 1st January, 1954, or the date upon which the pensioner became entitled to pension, whichever was the later.
A further important provision in the bill relates to the number of units for which a member of the Permanent Defence Forces shall be entitled to contribute. As honorable senators are aware, it is not at present possible for any member to contribute for more than 26 units of pension. The bill will permit those at present restricted to a maximum of 26 units to contribute for additional units entitling them to a pension on retirement’ more in keeping with their active rates of pay. The members to whom this provision will apply are those in the higher ranks, who retire at age 60, or close to age 60, and who, under the existing act, cannot qualify for a pension in excess of £1,014 per annum. The bill will -permit those officers to contribute for additional units, up to- a maximum of 36, and to receive retirement benefits commensurate with the total units contributed for, up to a maximum pension, in the case of the Chiefs of the Naval, Military and Air Staffs, of £1,638 per annum, should they retire on attainment of the retiring ages for their ranks.
In the case of pensioners who are reemployed by the Commonwealth in a civilian capacity, the ceiling of nondeductible pension has been lifted from £312 per annum to £364 per annum, or half the pension normally payable, whichever is the higher.
All the proposals contained in the bill are necessary to ensure that, having regard to the variations of the cost of living since 1951, reasonable provision shall be made for defence personnel upon their retirement.
Debate (on motion by Senator Armstrong) adjourned.
page 180
Bill received from the House of Representatives..
Standing Orders suspended.
Bill (on motion by Senator McLEAY read a first time.
.- I move-
That the bill be now read a second time.
Honorable senators will be aware that the Stevedoring Industry Charge Act levies a charge on employers of waterside labour, in order to provide the Stevedoring Industry Board with the necessary funds to carry out its statutory functions. These funds are applied in. the payment of attendance money to waterside workers, expenses relating to waterside workers, administrative expenses, and expenditure on capital projects, notably the provision of waterfront amenities. The purpose of the bill is to reduce the rate of the charge from lid. to 6d. per man-hour.
The charge, which was first imposed in 1947, has been varied from time to time to accord with fluctuations in the board’s financial needs. In October, 1952, the charge was increased from 4d. to lid., in order to counter a serious deterioration of the board’s financial position, which arose, principally, from two causes. The first was that waterside employment fell sharply during 1952, owing to the reduced volume of goods entering and leaving Australian ports, which caused revenue from the stevedoring industry charge to fall proportionately, and at the same time increased the number of attendance money payments that the board had to make. Secondly, the rate of attendance money was increased by the court from 12s. to 16s. per day as from the 1st October, 1952.
When the Parliament last considered the matter, it was informed that, after the deficit in the board’s accounts had been eliminated, consideration would be given to a reduction of the rate of the charge. During 1953-54 the board’s financial position has changed for the better, and we are therefore able to carry out the promise then made.
In this measure, we are following the practice of the previous Government of adjusting the charge from time to time to meet fluctuations in the revenue needed to meet the board’s proper expenditure. These fluctuations will probably continue, and further adjustments will almost certainly be necessary in the future. I might point out that the buoyant revenue under the present charge of lid. has enabled the board to embark on a substantial programme of capital works, comprising mainly the provision of amenities and facilities for waterside workers, which will make a significant contribution to the general improvement of waterfront conditions. An amount of some £300,000 has been set aside during the current financial year towards the cost of this programme.
As I have indicated, the new rate of charge will, so far as we can judge, provide sufficient revenue to meet the board’s estimated expenditure. The reduced rate will, at the same time, effect a saving in costs to the shipowners, who have already stated that the benefits obtained from the reduced stevedoring industry charge will be passed on in. the form of reductions in freight rates.
Debate (on motion by Senator Armstrong) adjourned.
page 181
Debate resumed from the 12th April (vide page 106), on motion by Senator Spooner -
That the bill be nowread a second time.
– This very small measure deals with the rights of officers who were transferred to the Commonwealth service, mainly from the PostmasterGeneral’s Department and the Customs Department, at the time of federation. I understand that it applies almost solely to pensioners who were formerly employed by the Western Australian Government. At the time of federation, these men had certain rights under the Western Australian Superannuation Act 1871. When they were absorbed by the Commonwealth service they retained all their rights and privileges. It has been the practice of successive Australian governments to adjust their pensions in accordance with increases granted by the Western Australian Government to pensioners under the State act of 1871. This bill brings persons who transferred to the Commonwealth into line with those who remained in the State service and have since retired. The officers who transferred to the Commonwealth did not come under the Superannuation Act. Under the State act of 1871, no payment was made into a fund, and pensions were paid by means of an appropriation from the Consolidated Revenue. When the Superannuation Act came into force in 1922 these men had reached an advanced age, having been in the Commonwealth service for 22 years. For obvious reasons, they could not come under the Superannuation Act. After they were absorbed by the Commonwealth service they were subject to the Public Service Act, and regulations thereunder, and were inclined to relate their pensions to the pensions provided under the Superannuation Act. From time to time the pensions payable under the Superannuation Act have been increased, and consequently some Commonwealth public servants have been more favorably treated than those ex-State officers to whom I have referred. This aspect of the matter is not apparent from the bill. The Opposition supports the measure and will expedite its passage.
Question resolved in the affirmative.
Bill read a second time, and passed througth its remaining stages without amendment or debate.
page 181
Debate resumed from the 12th April (vide page 107), on motion by Senator Spooner -
That the bill be now read a second time.
.. - The measure before the Senate amends the States Grants (Encouragement of Meat Production) Act 1949. The Opposition supports the bill, but it is pertinent to point out that the principal act gave statutory effect to an agreement between the Queensland Government and the Chifley Labour Government. The Minister did not mention specifically, in his second-reading speech, the contribution that is made by the Queensland Government to the encouragement of meat production.
Debate interrupted.
page 181
The DEPUTY PRESIDENT (Senator Reid). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the negative.
page 181
Debate resumed.
– Originally it was decided that £150,000 should be made . available - £75,000 by the Queensland Government and £75,000 by the AustralianGovernment - in order to. provide the facilities required in the cattle country in Queensland. However, the original proposal to make money available for stock watering was not confined to that area. A considerable sum of money was provided in order to assist in the improvement of roads in that area and also in areas in Western Australia where a similar problem existed in connexion with the movement of stock. Of the original £150,000, £131,000 has been spent, and a considerable amount of work has been done in pursuance of the plan that was contemplated in 1949. However, with rising costs in the intervening years, the necessity for reviewing allocations of money for this purpose has constantly recurred. This highlights the manner in which the cost, structure in Australia is affecting all primary and secondary industry. This is a matter which must receive, the attention of the nation and particularly of the Government which undertook to handle the problem five years ago, and which has handled it so unsuccessfully that increased votes are constantly becoming necessary in order to meet increasing costs.
It is important that any legislative body which is asked to vote money should know that the money that it has voted previously for the same purpose has been put to good use. What work has already been done with these funds? Three artesian bores and seven sub-artesian bores have been sunk and six excavated tanks have already been constructed. Work is progressing on one artesian bore, one subartesian bore and one excavated tank. In addition, contracts have been let for the sinking of three further sub-artesian bores, and for the construction of one excavated tank and eight raised earth tanks. Tenders have been invited for the drilling of a further artesian bore and for the construction of one tank, and specifications have been completed for five artesian bores and two excavated tanks. The artesian boring has been quite successful. One bore is discharging 700,000 gallons of water a day, which is considered to be a satisfactory output, whilst another will discharge 500,000 gallons of water daily. Consequently, it will be realized that the money that has already been allocated by Parliament for this purpose has been put to good use.
In voting a sum so small as £75,000, the Senate may be inclined to disregard the importance of the primary industry for which this small contribution has been proposed. I take this opportunity of chiding the Government, particularly the Treasurer (Sir Arthur Fadden), on the virtual neglect of Queensland. We seldom have the opportunity of discussing in this chamber a particular allocation of money for a Queensland developmental project. No major Commonwealth developmental project is in operation in Queensland at present despite repeated representations by the Queensland Government during the last five years for assistance for major projects. These projects would have a tremendous developmental value and a great defence signifinance and would result in an immediate economic return to Australia. However, all appeals have fallen on deaf ears.
– Did not the honorable senator vote against the government’s loan legislation?
– Whatever the Opposition did in relation to the loan legislation, it should be possible to obtain money for the States from the loan market in Australia. Standing Orders prevent me from discussing the loan legislation now. But the fact is that the Australian people have lost confidence in the Government and are no longer prepared to subscribe to Commonwealth loans to the extent that they did during the Labour Administration. In spite of a tremendous increase in national income, loan raisings are not up to the level that they reached five years ago. Financial starvation has been the lot of State governments, which are responsible for the development of primary and secondary industries. This is a result of the failure of the Government to raise loans.
As I said before, although the amount of the vote before the chamber is small it is to be used for an important purpose. Approximately 1,000,000 head of cattle are turned off Queensland pastures every year, and between 60,000 and 100,000 enter Queensland each year from the Northern Territory. A large number of these cattle are subsequently fattened in the Channel country. The Channel country is the area in the south-western corner of Queensland which lies around the projection of the State of South Australia into Queensland. It is called the Channel country because of the many rivers and creeks in the area, such as the Diamantina, Barcoo and Georgina Rivers and Cooper’s Creek, which flood in the wet season and subject the whole area to periodic inundation. The Channel country is extremely remote, both from it3 chief source of store cattle and. its market. Most of the cattle come from the Northern Territory, the Barkly Tablelands or the Gulf country and they are fattened in the Channel country before they go east or south-east to market. It is important that the cattle be brought to these pastures quickly and got away from them, quickly. The Barkly Tableland is not known to many honorable senators. It comprises an area, roughly the shape of a shoe, with its heel resting on Mount Isa and the sole stretching across Queensland and the Northern Territory in the direction of Darwin. It would be about 400 miles long and 100 miles wide. In the Northern Territory, the Barkly Tableland lies, iii a direct, line, about 400 or 500 miles from the Channel country, which is an isolated region. In the past, the Channel country should have been turning off young steers, but it has been fattening old bullocks, which are not nearly so profitable. My information is that cattle eighteen months old weigh 330 lb. when they are slaughtered, which represents 220 lb. for each year of life. At three years of age they weigh 530 lb. when slaughtered or 177 lb. for each year of life. At four years of age they weigh 650 lb. when slaughtered or 162 lb. for each year of life. At five years of age they weigh 700 lb. when slaughtered or 140 lb. for each year of life. It can be seen from these figures that as the age of the cattle rises there is a considerable deterioration in the weight for each year of life.
It is highly important, also, that cattle should be brought to the Channel country as quickly as possible and taken away from it as quickly as possible. But it is not possible to do that without adequate transport facilities. Cattle may he brought to the Channel country in the course of a good season, but if they travel slowly, by the time they get to their destination the season may be past and their condition my be too poor for them to fatten before the next season. If they are taken back to where they came from they loose condition. Improved transport facilities, either rail transport or improved stock routes with better watering facilities, would enable cattle to be brought to the Channel country faster. The alternative is a good system of roads, with road-train transport. Whichever method is adopted, the important thing is to get the stock in and out of the Channel country quickly. Another important factor is that the cattle can be turned off the Channel country in the spring or early summer to find appropriate markets in the southern cities of Australia. The position is different from that in the north, such as in the Charters Towers district.
The Channel country is an area of 60,000 square miles, of which 15,000 square miles are described as flood plains. The average annual rainfall is between 5£ inches and 11£ inches. I have figures here which indicate the periodic occurrence of floods over many years. In the flood season the Thomson, Barcoo, Diamantina and Georgina rivers flood and there is no possibility of impounding, the surplus waters. The nature of the country does not allow that to be done, and in any case the cost would be enormous. The effect of flooding is to inundate . approximately 8,000,000 acres. I understand that 12 acres of feed are1 required to fatten a beast, sp that the cattle-carrying potential of this area can. be readily seen.
The average turnoff from the Channel country at present is approximately 40,000 head. That is extremely low, having regard to the nature of the country, and is something which the nation should attempt to improve. It is estimated that the average turnoff, with improved transport providing for quick ingress and egress of stock, could be increased to 170,000 head, but that would still not be the maximum. It is said that the range could go from a nil turnoff in a bad ‘ season to an optimum, in a flood season, ] of 400,000 head. Having regard to cur- ‘ rent prices and the export demand for prime beef, it is not difficult to see the tremendous economic significance of this area to the whole nation. It is estimated that in a flood year, with improvements and assistance, the area could fatten between 600,000 and 700,000 head of cattle, but it would be necessary to bring them down quickly and get them away quickly. The breeding areas are the Barkly Tableland and the Northern Territory.
The improvement of stock routes is a compromise measure. We in Queensland wish to see the development of the rail transport system. The Abattoirs Commission, which sat in Queensland some years ago, investigated the whole problem of the Northern Territory breeding grounds for the Channel country, the fattening grounds, and the provision of adequate transport. It came to the conclusion that rail transport, which would necessitate connexions between Dajarra and Camooweal, then on to Newcastle Waters, and down through Quilpie to connect with the Queensland southern lines and so on into New South Wales, would be the best solution of the transport problem, not only for the Channel country, but also for the outback areas of Queensland. Such a project, although requiring the provision of a considerable sum of money, could be done in part. I understand that the Queensland attitude is that the connexion with Dajarra and Camooweal, which would be relatively inexpensive, would not of itself be completely effective. The project would also require the extension of the line from Camooweal to Newcastle Waters. Although the cost would be considerable I suggest that, in the light of the background which I have tried to give the Senate, it would not be too great. The estimated cost of the 158 miles of railway between Dajarra and Camooweal is £5,000,000. I do not know that that is a recent estimate; it may have to be considerably revised. The estimated cost of the longer extension between Camooweal and Newcastle Waters, a distance of 360 miles, is £17,500,000 if executed with Australian material, and approximately £18,500,000 if executed with British material.
– Is the honorable senator able to say whether the committee appointed by the Queensland Government to investigate the construction of that railway line recommended its construction ?
– I think that it did so. I take it that the honorable senator is referring to the Abattoirs Commission ?
– No. I am referring to a special committee which was appointed to investigate this railway line specifically and which made a report.
– I was referring to the Abattoirs Commission, the report of which I have in front of me. I am afraid I cannot give the honorable senator the information he seeks.
It is obvious that the full development of this area depends on improved means of transport. Whilst there may be differences of opinion concerning the form that that improvement should take, I suggest that they are really matters for consultation. We must develop a consciousness that this part of Queensland belongs to Australia as a whole and that it is capable of carrying an industry of immense value to the Australian economy. This bill should receive the enthusiastic support of every honorable senator. We in this chamber can, and often do, divorce ourselves from purely parochial affairs. We should regard this measure from the wider Australian view and look upon it as only the beginning of the development of an extremely valuable area.
If the Government admits that to-day there is no major Commonwealth developmental scheme on foot in Queensland, I suggest that here is a project which might well receive its close and early attention. There is always an assured market for beef. It is one of our stable exports and is almost in the same category as wool. It is a commodity for which the whole world is seeking. To invest money in such an industry would be a completely safe investment. Not only would it be of economic value but it would also help to populate the area. The construction of railways invariably attracts people who settle along the length of the line. For instance, many of the towns on the line to Mount Isa derive their lifeblood from the continuous rail traffic due to the great lead and’ copper mines at Mount Isa, 1,000 miles away. In my opinion, our national conscience should demand the development of such important areas. Although the Opposition supports this bill, it points out that, at the moment, a joint contribution is made, the Queensland Government providing from its slender resources an amount, equal to that provided by the Commonwealth. Honorable senators on this side o£ the chamber hope that in the not-too-distant future the financing of the project will be by a straight-out Commonwealth contribution.
.: - Having had experience of the country, to which this bill ref ers-, I am in a position to endorse the observations of Senator Byrne’ to the effect that although this money will be devoted to the provision of water along the stock routes, that will not provide- a total solution of the problem. Those who have seen this country in drought time know that unless it is possible to transport stock quickly, from the drought stricken areas to higher rainfall areas, huge losses of stock will continue to occur. The provision of artesian bores along the stock routes has been a- long process. From my experience of the western part of Queensland,, stock routes along which water was available every twenty miles were considered good routes. Gradually, however, the stock inspectors appointed by the Queensland Government have located suitable sites for bores, so that the lot of the. drover is now much easier than it was previously.
In my opinion, the provision of railways in these areas is vitally necessary. Unless we are prepared to expend the large- sums of money that would be involved- in- making the necessary rail connexions, we shall never- be able to say that the inland of Australia is being properly developed and exploited. It is really necessary to live in those areas to appreciate the vast difference that a fall’ of rain can make. After seasons when ten, fifteen, or twenty inches of rain, falls the area- looks like a wheat field, but in. the dust storms experienced in, summer the grass dries off and blows away. The area then becomes as bare as- a billiard table. It is at such times that the greatest stock losses occur. The stock lose condition rapidly and if they are unable to travel, die on the wayside. There is nothing more- depressing than the sight of dead stock lying along the: stock routes. This legislation, by making possible the provision of water at regular intervals along the routes,, will help to improve the position. I support the bill because, in a small way, it will alleviate the- difficulties which beset those who are pioneering our outback areas. I have no doubt that all honorable senators agree that those who live in conditions of great heat and drought, and who are sufficiently hardy to go- out to- such areas, merit assistance. Anything that can be done to better their lot, and at the same time develop our potentially rich hinterland, will receive my full support.
.- On behalf of Western Australia, I” wish to thank’ the Government for deciding to increase the amount payable to that State for the improvement of stock routes. I do not propose to embark on a detailed discussion on the matter, as my Queensland friends have d’one. Our difficulties in Western Australia are not exactly the same as those in Queensland. We do not travel stock to fattening areas, but we do travel them from the stations to the meat works at Wyndham and to the rail head at Meekatharra for consignment to Perth. The provision of water along the stock routes is our great problem. Part of tha Kimberleys area is: now experiencing a five-year drought, but I was pleased to read in to-day’s Western Australian that some good- rain had fallen. Bains have fallen in the northern area but the rainy reason is passing and we cannot expect much more. Any additional water along the stock routes will be of great assistance. I noticed in the press several weeks ago that a fine tribute had been paid to the quality of Western Australian beef. The Government of Victoria was giving a banquet to the Queen- and obtained steak from Glenroy Station, the air-lift station. I know something of its quality and- can recommend it highly. The provision of watering holes along the stock routes will assist the production of that meat and its transport to eastern Australian markets. 1 express thanks to the Government for the additional money that it is making a val table
.- The object of the bill is to amend the State Grants (Encouragement of Meat Production) Act 1949. I have no doubt that if honorable senators were invited to make suggestions how meat production could be increased in Australia, they could offer valuable advice, but the principal act limits the expenditure of money in this case to a certain area in Queensland known as the Channel country. Many persons might believe that there is running water in the channels there, but that i<5 far from the case. The channels are almost permanently dry. They are dust pans for the most part. However, the area is fertile when rains fall, and it is used for fattening stock bred in that locality and in the Northern Territory.
I was rather disappointed when the Minister for National Development (Senator Spooner) did not indicate in his speech how much stock owners appreciated the roads that had been constructed in the . Channel country. I read recently that a road, train had passed from Brisbane towards Bouila in the Channel country. It was approximately 170 yards long, consisting of seven units, and was manned by fourteen men. That read train is used to transport fat cattle from a station in the Bouilia district to Dajarra on the Townsville line. The journey from the station to Dajarra takes ten hours and each unit carries twenty cattle. That means that a total of 140 cattle are transported by the road train into Dajarra. Over a period of four weeks, approximately 1,400 cattle are transported in that manner from the station to Dajarra. Then they are carried by train to Townsville and into the meat works. That would not have been possible had the vote in 1949 not been used to construct roads and cattle loading points. The value of the plant is approximately £00,000 and the owner estimated that by transporting cattle in that manner, he was able to profit to the extent of £36,000. He estimated that, because, the condition of the cattle was preserved during transport between the station and the meat works, 600,0001b additional weight of beef was made available to the consuming public. That is a concrete example of the use to which the roads are being put.
There is no such thing as a macadam road in that area. The roads are all earthen. The most that can be done in the way of road construction is to knock down the bumps and take out a few stones where jolting would cause bruises to the cattle. It is customary for the stations in the Channel country to be worked in conjunction with other properties. On the Barkly Tableland, which is in the Northern Territory, several huge properties are worked in conjunction with pastoral properties in the Channel country and elsewhere. Alroy Downs covers 3,702 square miles and it is little more than a horse paddock compared with Alexandria Station, which has an area of 11,262 square miles and is the largest cattle station in the world. Brunette Downs covers 4,730 square miles and Anthony Lagoon 2,097 square miles. Obviously, if station owners on the Barkly Tableland want to get the most benefit from their breeding activities, they must have properties elseswhere on which to fatten the stock for market. The owners of Anthony Lagoon station have thirteen stations in Queensland. Some are sheep stations, but the others are cattle stations. They also share with the owners of Alroy Downs a property at Camooweal, which is towards the Channel country. In addition, they have’ eight or nine stations in New South Wales.
The demand for meat is increasing every day, and if Australia is going to preserve its present level of exports of meat, and also provide for home consumption, it will have to offer more than tracks in the Channel country. It must provide watering facilities on the stock routes. The level of beef production is such that it calls for more encouragement than the Australian Government is giving it at present. Probably the whole problem could be solved by closer settlement of some of the properties to which I have referred.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
page 187
Debate resumed from the 12th April (vide page 108), on motion by Senator Cooper -
That the bill be huw read a second time.
– Most honorable senators know the history of the aluminium project in Tasmania. In 1943, a start was made with that industry under the direction of the Minister for Supply at the time, Mr. John Beasley. I accompanied him to Tasmania in that year. The amount that was mentioned then as necessary to bring the aluminium project to fruition was £3,000,000. The Government took the initial step because it had tried throughout the world to get the known aluminium producers interested in the production of aluminium in Australia. For its own reasons, the aluminium cartel was not interested in the production of aluminium, in Australia at that stage. It was much happier to supply aluminium to Australia from overseas. Australia, moving forward to nationhood, had to produce aluminium in its own country and the government of the day launched the Tasmanian project. Eleven years have passed. The project should have been in operation in 1952, but a start will not be made with production until early next year, according to present hopes. The disturbing aspect of the project is that to which Senator Byrne has referred. That is the fact that more and more money has been poured into the project because of inflation. As late as 1951, the government of the day estimated that £4,500,000 more would be needed to complete the project. That appears to have been a poor assumption, because the bill that is before the Senate provides for expenditure of £2,000,000 more, making a total of £9,000,000 that the Australian Government has put into the venture. There is reason for some worry because of the long delay in bringing the project to fruition and because high capitalization will make the economic operation of the plant more difficult.
The time is rapidly approaching when it will be necessary to prepare plans for the expansion of the aluminium industry, whether it be in Tasmania or in another part of Australia. The growth of the nation seems to confuse even the most forward planners. When the industry was started, pre-war statistics showed that aluminium consumption in Australia was 3,500 tons a year. The government of the clay thought that it was far-sighted when it provided for a production of 5,000 tons a year. The plans were extended and finally the project provided for the production of 13,000 tons of aluminium ingot each year. I believe that even that quantity will not. be sufficient for the future. Now is the time to plan additional output from Australian aluminium factories. Recently, a proposal to set up an aluminium industry outside Port Moresby at Rouna Falls was investigated. Experts considered that the supply of water was sufficient to provide the cheapest power in the world. Perhaps some plans are being made and a. close watch is being kept on the flow of the water to make sure that it is constant over the years. Obviously a major tragedy could be caused to the industry if the flow of water ceased in a- drought. One of the best methods of strengthening and developing our island territories is to set up secondary industries in them. The aluminium industry would be of great defence value. It would attract many thousands of Australian employees to New Guinea. When the plant at Bell Bay has been completed, it will produce 13,000 tons of aluminium ingots a year. That will not be enough. Once again it will be the old, old story. Even when the industry is in full production, we shall still find it necessary to import as much aluminium as we are importing now so that our dollar expenditure on that commodity will not be reduced. This country must become self-supporting in basic items such as aluminium. Having established the production of aluminium ingots, the next step is to venture into the more profitable phase of the industry I refer to the rolling of aluminium. Today there is a shortage of rolling capacity for all metals. Such a project, of course, would require a considerable sum of money. A further £3,000,000 or £4,000,000 would be required to establish rolling mills to handle the output of aluminium ingots in Tasmania.
– Yet the La’bour party objects to capital coming from overseas !
– There is no shortage of capital for this .undertaking.
– Why did it become a government enterprise?
– Private industry would not look at it in the early stages and the Labour Government decided that Australia should not be held to ransom by overseas aluminium monopolists. We realized that aluminium was needed for the war, and that it would be needed after the war had ended. Therefore, we decided that it should be produced in this country. The attitude of conservative governments to great undertakings such as this is well known, and their behaviour follows a familiar pattern. They are conservative governments according to the true dictionary meaning of the word “ conservative “ because they are opposed to any change. On the other hand, Labour governments look forward as the Curtin Government did in this instance. Unfortunately, it is the practice of non-Labour governments when they take over flourishing enterprises established by preceding administrations, to maintain those enterprises while the impetus given to them by Labour remains, and then to allow activity to slacken. That attitude is evident in this Government’s approach to the aluminium industry. On some other occasion I shall refer to other projects that have met a similar fate. The things of which this Government is proudest are largely the things that Labour started, but unfortunately many such enterprises have been ruined by this Government in its three years of office. However, I propose to confine my remarks to-night to the aluminium industry. My first criticism is that the inflation which this Government allowed to run riot is the cause of the successive demands for more and more money to complete the project. It is not that more work is being done. The plain truth is that inflation has increased the estimated cost of the undertaking from £3,000,000 to £10,500,000. My nest point is that the Government should not have been content to leave the production target at 13,000 tons a year.
It should have been looking around in Tasmania, provided the electricity is available there, on the mainland, .or perhaps in New Guinea, with a view to establishing other plants for the production of aluminium ingots. In addition, rolling mills should be built to handle the aluminium that will be produced at Bell Bay. As I have said, we are short of rolling capacity and exorbitant charges are being made by the owners of rolling mills. Those charges, will be placed on top of the cost of producing aluminium in Tasmania, as they have been placed on top of costs in other industries to-day. However, it would not be fair for me to give details of that matter here. It is important that the Australian Government should have its own rolling plant for aluminium. After all, if the Government is to be in the aluminium business at all, it might as well be in the more profitable side of it. The Opposition will not oppose this bi.li:
– I support the bill, and I shall not take up much of the time of the Senate. However, I would like some information about this project. I believe that the Senate is entitled to receive that information from the Minister or perhaps from a representative of Tasmania in the chamber. As we have already been told, in 1944 the estimated cost of this undertaking was £3,000,000. Now, it ?s to cost £10,500,000. Of that sum, £9,000,000 will have been subscribed by the Commonwealth Government and the remaining £1,500,000 by the Government of Tasmania. Senator Armstrong has just told us that the reason for the increase is the rise of costs since 1950. In my humble opinion, those who made the original estimate of £3,000,000 have something to answer for, and possibly the government of the day also has something to answer for. I remind the Senate that the legislation to establish this industry was passed by the Parliament in 1944. What happened to this project between 1944 and 1950? I speak in complete ignorance of this matter, and I am seeking information on it but is it not reasonable to expect that the £3,000,000 which the undertaking was originally estimated to cost could have been expended long before 1949? Why was the project not completed years ago? There may bc u very good answer to that question. If so, I should like to hear it; but surely there would have been no difficulty in expending at least £2,000,000 by, say 1947, when this dreadful inflation about which we have heard so much really started. I remind the Senate that Labour was in office at the onset of inflation. All the ingredients were in the pot long before 1950. There is much truth in the old saying, “Behold! How great a fire a little flame kindles “. The fire has taken some putting out and the thanks arc due to this Government for the manner in which the fire was eventually extinguished. I may say in passing that Tasmania appears to have been very generously treated in this matter by successive Commonwealth governments. Only £1,500,000 has been provided by the Tasmanian Government for the establishment of this project which, of course, will mean very much to that State as well as to the Commonwealth as a whole. The original proposal was that finance should be provided equally by the Tasmanian Government and the Commonwealth Government. Before long, however, the Tasmanian Government simply said, “ We are sorry but we cannot put any more money into this undertaking “. The Commonwealth Government decided, very generously I believe, to provide a further £4,250,000.. Now, further provision has to be made by the Commonwealth. Once again we have been told that poor Tasmania has no more money to invest, and the Commonwealth has agreed to contribute a further £3,750,000. I commend the Government for taking such a dee]) interest in this undertaking which will provide 13,000 tons of aluminium ingots annually, hut I hope that some one will be able to answer the questions I have asked.
– in reply - In answer to Senator Pearson, the reason for the delay in bringing the scheme to fruition is the lack of electric power which is to be supplied by the Tasmanian Government. That also answers Senator Armstrong’s question about the output of aluminium.
Mr. Cosgrove says that the power can be provided, but apparently there is some doubt about that. However, I remind Senator Armstrong that the production target has already been increased from 10,000 tons a year to 13,000 tons a year.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
page 189
– On the 12th April,. Senator Armstrong asked- the following question: -
I ask tile Minister representing the PostmasterGeneral whether it is a fact that the Government has placed ‘ a ceiling on employment in the Postmaster-General’s Department. If so, does the ceiling apply to employment in the Engineering Branch of that department? Is the Engineering Branch responsible for the installation of telephones? How many applications for telephones were unfulfilled in March, 1052, and how many are outstanding to-day? If this ceiling on employment exists, will the Government lilt it in order that the urgent work of installing telephones may he completed ?
The - Postmaster-General has supplied the following answer: -
The Engineering Branch of the PostmasterGeneral’s -Department is responsible for the installation of telephones. The staff of the branch which may be employed on this and other new work is determined by the funds voted by Parliament for capital develop- - ment. The number of outstanding applications for telephone services at the beginning of March, 1952, was 90,371, and this has been reduced to 68,071. During this period 192,502 services have been connected. The staff to be employed on new engineering work during 1954-55 will, of course, be related to the funds voted by Parliament.
page 189
The following papers were presented : -
New Guinea - Report to the General Assembly of the United Nations on the Administration of New Guinea for - year 1962-53.
Postmaster-General’s Department - Fortythird Annual Report, far year 1952-53.
United Nations - ‘General Assembly - Eighth Session, New York, September to December, 1953 - Summary Report -of Australian Delegation.
Senate adjourned at 11.29.
Cite as: Australia, Senate, Debates, 13 April 1954, viewed 22 October 2017, <http://historichansard.net/senate/1954/19540413_senate_20_s3/>.