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Thursday, 9 March 1961


Sir EARLE PAGE (Cowper) .- Mr. Deputy Speaker,first of all, I should like to congratulate the Acting Prime Minister (Mr. McEwen) on the bold statement of development policy that he gave to this House last evening and this morning. I should like, also, to pay tribute to the honorable member for Higinbotham (Mr. Chipp) and the honorable member for Calare (Mr. England) for their maiden speeches, which gave very great promise for their future development as members of this House.

The Leader of the Opposition (Mr. Calwell) has once again come forward with the usual sort of motion in which he blames the Government, and especially the condition of our trade balance under its administration, for everything that is bad in our economy. He never says a word about what is good. We all know, of course, that when we have a good trade balance, it is due to the intelligence and skill of our primary producers who provide some 80 per cent, of our total exports in order to earn overseas funds and give us a favorable trade balance. It is well worth our while to thank our primary producers a little for their efforts.

On this occasion, the Leader of the Opposition has raised as fresh points of attack many points which are really the same old ones that he usually takes up. I propose this afternoon to say something about one action of the Australian Labour Party which has done a very great deal to cripple the development of this country. I refer to the imposition of the uniform tax system. 1 hope to show very clearly that national development, which, under the terms of the Australian Constitution, is essentially a State function, is being hamstrung by the manner in which the uniform tax system is applied. Unfortunately, there is here an analogy to the act of scrambling an egg. Once it is scrambled, one cannot restore it to its original state. We need some constructive method by which we can permit the States to exercise their constitutional function of developing this country as quickly as possible and as quickly as it needs to be developed.

I wish to deal briefly with the subject of the trade balance, which seems to worry the Opposition so much. A young country like Australia, which seeks to increase its population and promote development, cannot depend entirely on its own resources any more than a youngster in a family can expect to clothe and feed himself. The youngster needs assistance from his family. That is exactly the situation of a young, growing nation like Australia. We need outside aid. We have only 10,000,000 people. Fifteen years ago, we did not have nearly so many people to undertake the development of this country. It is worth our while to look at what has happened in countries which have had problems similar to ours - a huge area and only very few people to promote its growth and rapid development. The best example to which we can look is that of the U.S.A., which has roughly the same area as has Australia and which passed through the same primitive stage of development in similar circumstances. The situation of Australia has many analogies with the situation 01' the United States in earlier years.

In the first 56 years after the American colonies united, they managed to increase their total population from 5,000,000 to 20.000.000. We, 60 years after federation, have increased our population from 4.000.000 'o 10,000,000. That is not such a bad effort in these days of difficult migration. During practically the whole of the first 56 years of the American union, there was an adverse balance of trade of an average of something like 11.000,000 dollars a year, because the new nation was attracting people, money and goods from other countries. What happened in the next twenty years? Because of the great population that the United States had managed to build up previously, it was able almost to b° lance its trade. The American people hen turned to the problem of developing the country as a whole, and in the next 25 years the population rose from 20.000.000 to 40.000.000. During that period, there was a continuous excess of imports over exports which averaged something like 64.nno.000 dollars a year. Did we then find in the United States Congress every year the sort of belly-aching that we hear in this Parliament, not because our trade has declined by a few million pounds, but because the balance is not as favorable as before? There are still overseas balances of £200.000.000 or £300.000.000 between us and the ed.se of the precipice, as it were. And even if all that goes, we shall probably have some friends who will stand by us.


Mr L R Johnson - Under the administration of this Government, we shall not have any left and the right honorable gentlem~n knows it.


Sir EARLE PAGE - I shall deal with the honorable member later.

The American people dealt with their problems. They got the people and the money and developed their country, and for another 40 years they maintained a favorable balance of trade. When the First World War broke out in 1914. Chey , were able. because of the development that they had already undertaken in their country, to wipe out the whole of the foreign debt of the United States. It is worth our while to remember what the Americans did at that time in order to ensure that they would get the increased population and development and the wealth that they needed. They continually formed new states - two in every ten years. They actively encouraged immigration and the entry of foreign private capital, as well as the borrowing by the government of the funds that they desired for its purposes. I venture to suggest that we shall have to follow a path similar to that taken by the United States of America if we desire to get in this country the enormous population that we need. We face a tremendous task in getting our population up to 30,000,000 or 40,000,000 in the next twenty or 30 years, but such a big population is essential to us. If we do not get it, we shall never be able to hold this country.

I will set out what 1 believe we need in this country to ensure that we will hold it. I am very glad to know that the Acting Prime Minister last night and to-day outlined a very forceful development programme which breaks a great deal of tradition. I think this tradition has been bad because it has always said that the Commonwealth could not help in any of these matters unless they were interstate matters. I am glad that that idea has been abandoned. It is very good for the Commonwealth to be concerned in these matters: they are really national matters. I hope to show later that we could get all the governments. Commonwealth, State and local governments, into a partnership as we have done with the Australian Loan Council, the Australian Agricultural Council and other organizations which were brought into being by me many years ago. They enabled us to forget the constitutional difficulties if we could not remove them. I am all for removing them at the earliest moment, but I am much more concerned with saving this country by rapid development.

Our first need is for more people. We need good migrants. It seems to me that one of the best ways to attract the better class of migrant is to concentrate on obtaining married migrants. I am sure that they will be better and more satisfied than the single man or woman who comes here. If we can bring migrant families here, they will be much 'better satisfied. If we are to bring families here, the first essential is the provision of houses. There seems to me to be an extraordinarily good opportunity at this time to build houses when there is an excess of timber in the saw mills operating in the area I represent. Questions asked by other honorable members would suggest that there is an excess of timber in other areas as well and mills will be shut down. That is really a policy of despair. 1 urge most strongly that we build houses in advance, if necessary. They will be the best assets that we can have because we will be able to get better migrants to come here if housing is readily available for them. If we provide houses, I am sure we will be backing a winner and not a loser. This would be especially so if we built timber houses, which apparently now are built only by people in outback areas, provincial cities and country towns. This would enable us to be ready for widespread decentralization in areas where there would be much more home life, where travel to work does not occupy as much time as it does in the large cities and where the children can see the parents much more readily than they can in the large cities.

We must ensure that our transport systems are improved. Federal aid for roads has proved to be a good scheme and has provided material assistance throughout Australia, but there are many areas where the roads are very bad indeed. A car does not last very long if it is driven over them constantly, and the cost of transport increases because of this factor. We should not restrict ourselves merely to an improvement of the road system, but I venture to say that we must begin to use the great oceans that surround us. We are in a better position to engage in world trade than is any other continent. The best country in Australia lies within an area stretching inland only 300 miles from the ocean. Sir George Buchanan pointed out many years ago that this nation had the best opportunity for world trade that he had ever seen, because all its important regions were right on the ocean.

It is essential that we develop our water resources. This is the most important point of all, because water is necessary for home use, for town water supplies and sewerage, for irrigation and for secondary industries. Many thousands of gallons of water are needed to make a ton of steel or paper. The development of our water resources could eliminate the two great plagues of drought and flood that have cost us many thousands of millions of pounds since our race has occupied this country. The Commonwealth Scientific and Industrial Research Organization estimated that in the 1945-47 drought the loss in wool alone was about £600,000,000. In the 1942 drought half the sheep population of Australia died, and in Queensland about 80 per cent, of the cattle died. This was not merely a loss of the cattle; in many instances the breeders were lost. We lost the female cattle that would have given progeny, and it took 40 or 50 years to recover our position of animal population.

It is absolutely essential that the States should be able to deal with this question of water resources, and this is where uniform taxation hits the States hardest. The formula that was adopted at the beginning seemed fair enough when Mr. Chifley introduced it. It provided that the amount paid to the States would increase in proportion to population growth. However, it was found that this arrangement was not ideal. The population increase was about 2 per cent., but the production increase was about 8 per cent., and it is from production that income tax and most other taxes come. The Commonwealth, because it collects income tax an-J other taxes, receives very much more benefit from increased production than the States ever do. We find, therefore, that the States are in a hopeless position because of the works they must undertake, especially in the supply of water.

I should like to give some instances of this. I mention first the Mareeba water irrigation scheme in Queensland, where they irrigate several thousand acres of tobacco. The State government has spent about £12,750,000 on this water scheme and the amount of tobacco grown has increased from about 1,500,000 lb. to more than 6,000,000 lb. The increased production of tobacco last year was worth, in short, some £4,000,000. This had two effects. First, it reduced the amount of tobacco imported; and, secondly, it increased the taxation collected by the Commonwealth by £1,600,000. Some 40 per cent, of the additional £4,000,000 went to the Commonwealth in excise and other taxes, and the State received only £400,000, which is about half the interest on the capital provided for the water development.

It seems to me that the time has come, if we really mean to carry out this ambitious scheme announced by the Acting Prime Minister and to do something worth while, when we should get busy and conserve fully the water resources of Australia. I suggest that we should follow the American example. The Americans, of course, relatively have much more water than we have, but they have come to the conclusion that a partnership between Federal, State and local authorities is necessary to control and develop water resources. Although there is no uniform taxation in America, the Federal Government receives the largest share of taxation. As a result of their examination, they have decided that the Federal Government should find the whole of the cost of the head-works associated with water conservation and water-power development, that the States should find the cost of the channels, and the local authorities should deal with those matters associated with putting the water on the farms. The Federal Government finds the cost of the head-works without interest and without redemption; there is no question of the money being paid back.

Under our system of uniform taxation, we first give a certain amount to the States according to the formula. Then we raise quite a substantial amount from the people by taxation and lend this to the States. We charge the States not merely interest but also sinking fund payments on it, though it has never been a debt at all. At present, I think the States are paying £104,000,000 in interest on their debt. Fifteen or twenty years ago, they were paying about £30.000,000. The increase has been tremendous.

I have tried to do something about this problem and to-morrow I will deal with it at a big water conservation job in Orange, which will be attended by a very representative group of people. T have already looked at the whole of Australia and 1 have exact information of the losses that have occurred as a result of lack of water, and I hope that all honorable members will help to get something worthwhile done to solve this problem. As examples of losses that can occur, I refer to two dams recently completed in New South Wales. The first is the Glenbawn dam on the Hunter River, work on which was commenced about 30 years ago. Although the original estimate for that dam was £1,500,000, the final cost was £13,000,000, with the result that, instead of costing from £3 to £4 an acre foot, the water is costing the farmers £34 an acre foot and the authorities are now experiencing some difficulty in obtaining enough finance for the construction of channels to reticulate the water over the land instead of allowing it to run away down the Hunter River. The second is the Keepit dam, which cost £13,000,000 to construct although the original estimate was £1,340,000. This will make the water too dear to use. In the final analysis, this Parliament is the real defender of Australia, and I urge it to insist that the Government ensure that the waters of all the large rivers from the north to the south are harnessed so that we may settle people on the land, increase production and reduce the risk of loss from drought. If we do that, it will be possible for us to save millions of pounds by way of interest and so avoid heavy adverse trade balances. In conclusion, let me say that I first became interested in this scheme about 40 years ago, and I want to see the work completed before I die.


Mr DEPUTY SPEAKER (Mr Lucock - Order! The right honorable member's time has expired.







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