Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 16 March 1961

Mr COPE (Watson) .- In supporting the want-of-confidence motion proposed by the leader of the Opposition (Mr. Calwell), I should like to deal with two matters of vital concern to our present and future progress in Australia - our overseas credit balances and our international trade. Let me deal first with our overseas credit balances. In the financial year 1949-50, when the Chifley Government went out of office, our reserves stood at £650,000,000. In addition, Mr. Chifley had made three grants totalling more than £45,000,000 to the Government of the United Kingdom when that country was badly in need of funds to enable it to buy food. The Chifley Government had also paid off £116,000,000 Australian of our overseas debts. I point out, also, that in 1949-50 imports into Australia amounted to £537,000,000. With our overseas reserves standing at £650,000,000 at that time, we had in reserve enough to enable us to purchase imports at that rate for fourteen and one-half months. Let us contrast with the situation in 1949- 50 the position to-day, more than eleven years after the Menzies Government took office in 1949. We have overseas credit balances of approximately £300,000,000. The estimated flow of imports into this country in the present financial year totals £1,050,000,000, and our overseas credit balances are sufficient for imports at this rate for only three and one-half months. This is the one and only basis for comparing the value of our overseas credit balances in 1950 with the value of our present balances.

The total of £300,000,000 in reserves overseas does not paint a true picture, because this Government has borrowed £308,000,000 outside Australia since it was elected in 1949. There has also been a capital inflow into this country in the last eleven years totalling £997,000,000. So, in all, we have obtained from overseas £1,305,000,000 in two major components. When we offset that amount against the present overseas reserves of about £300,000,000, we find that our trading balances have fallen more than £1,000,000,000 behind since this Government took office. The present Government's haphazard methods of controlling our economy suggest that if the Government had been in control of a private commercial organization, that organization would have gone into liquidation some years ago.

The precarious position of our overseas reserves has been accentuated by the Government's stupid blunder in abolishing imports control in February of last year - a step which has resulted in the flooding into this country of many unessential luxury goods which compete with the products of Australia's primary and secondary industries, thereby forcing Australians out of employment. I should like to mention some of these unessential luxury items. Only a few weeks ago, I saw in the Sydney newspapers advertisements for men's wristlet watches which are offered on the Australian market for £220 each. I suggest that perhaps only people in the fortunate position of the Minister for Health (Dr. Donald Cameron), who is now at the table, could afford to buy one of those watches. Yet they are imported into this country in large numbers. We have also seen many other men's wristlet watches offered for sale at prices ranging up to £200, and I have seen an advertisement for a lady's diamondstudded wristlet watch at a price of something like £500. We see advertised women's fur coats at prices up to 500 and 600 guineas. We also see being imported into Australia expensive limousine cars and many articles and goods which compete with the primary products of this country on the local market.

I refer particularly to imports of tinned chicken. Every table bird that is marketed by Australian poultry farmers requires 10 lb. or 11 lb. of wheat for feed. Therefore, for every bird by which the sales of local poultry are reduced, because of the imports of tinned chicken, the wheat farmers lose sales of 10 lb. or 11 lb. of wheat on the Australian market. We see being brought into this country also tinned ham, jam conserves, bread, breakfast cereals and many other goods that compete with Australia's primary products on the local market. But so far I have not heard one member of the Australian Country Party protest in this House against the unfair competition to which Australia's primary producers are being subjected. We often read in the newspapers that sugar cane is being dug into the ground because the farmers cannot sell it. Yet the sugar which could be obtained from that cane would have a ready market in Australia for the manufacture of con fectionery, jam conserves and other important foodstuffs if imports of such items were not selling on the Australian market in great abundance.

A comparison of the figures for our imports from the United Kingdom in the first seven months of this financial year - the break-up of the figures for February h not yet available - and the figures for the first seven months of 1959-60 shows an increase from £181,000,000 to £206,000,000- an increase of £25,000,000 or 14 per cent. Imports from the United States of America have risen in this period from £77,000,000 to £131,000,000- an increase of £54,000,000, or 70 per cent. The volume of imports from Japan in the same period has jumped from £22,700,000 to £45,100,000- an increase of £22,400,000, or only a fraction under 100 per cent.

It is interesting to note that the Treasurer (Mr. Harold Holt) has stated that one of the most important reasons for the application of the credit squeeze was the need to damp down the excessive flow of imports into Australia. The prediction that the credit squeeze would do this has not come true, and our overseas reserves are dwindling to dangerously low levels as a result. If we accept the thesis of the Treasurer that the credit squeeze provides an effective means of controlling our economy, we must accept the view that credit restrictions will be a permanent feature of government policy; for is it not only reasonable to assume that if credit restrictions are removed, we shall again see an excessive flow of imports into this country? I believe that that proposition is irrefutable.

On many occasions, the Opposition has offered constructive suggestions for the countering of this serious threat to our economic stability. The Leader of the Opposition has repeatedly stated that we must have selective imports control. The Australian Labour Party's policy favours encouraging the expansion of our primary and secondary industries, and we realize that these industries must be afforded ample protection against unfair competition. We are aware that if employment is to be provided for our expanding population, including both the natural increase and the migrants whom we have brought from overseas, the protection of Australian industry is the one and only means of achieving our goal. We also believe that local industry must be encouraged to manufacture many essential goods not at present being manufactured in Australia, thereby making us less dependent on overseas sources of supply and conserving our overseas credit balances.

This Government has created a farcical position. It says that we must attract overseas investment in Australian industries, is it not foolish to suggest that any overseas firm would establish an industry in Australia, when the Australian market is already being flooded with imported goods? The big manufacturing concerns overseas can produce goods and because of our high costs can even sell them on the Australian market cheaper than we can produce the same goods. Our high costs are the fault of this Government because of its failure to implement that great votecatching statement made in 1949. We all remember the present Prime Minister (Mr. Menzies) saying, during the 1949 general election campaign, " Our greatest task is to get value back into the £1 ". That was one of the things which won the election for honorable members opposite. But what has happened? We cannot compete with overseas countries because of our production costs. Other countries can produce goods by automation and with cheap labour and undercut us on our own market.

Recently, the Acting Prime Minister (Mr. McEwen) said that it was the intention of the Government to engage in a great export drive. But there were two things that he did not tell this House. He did not tell us what the Government's plans are, and he did not tell us what and where we are going to sell. Those are the 64-dollar questions. There is not one person in the Government, from the Acting Prime Minister down, who can tell us what and where we are going to sell. Is anybody in this Parliament so naive as to believe that we can manufacture goods to compete with the Japanese, the West Germans, the British and the Americans in overseas markets? It is ridiculous to suggest that we can do so in the present circumstances. Admittedly, we export two commodities to the United States which have a firm grip on the American market. I refer to Aspros and Kiwi boot polish.

The Labour Opposition has stated, and I firmly believe, that our future prosperity depends largely upon seeking trade with Asian countries, particularly mainland China. This Government is trading with mainland China, but only by sneaking around to the back door hoping to conceal the fact that it is accepting red Chinese gold. Recently, we sold to red China 1,050,000 tons of wheat and 40,000 tons of flour, worth altogether £30,000,000. When I asked a question about this yesterday, the Acting Prime Minister was very evasive and introduced the technicality that this wheat was not sold toy the Australian Government but was sold by the Australian Wheat Board. We all know that that is tommyrot, because the Government must agree to the export of any commodity from Australia. So the Government condoned and encouraged this sale of £30,000,000 worth of wheat and flour, which is of great benefit to our wheat-growers.

The Labour Party believes that we should open the door to trade with mainland China or with any other Asian country. We should go in through the front door and not sneak around to the back, as the Government does, like a prowler in the night, worrying whether the Australian Democratic Labour Party will see it and cause Government candidates to lose a few preference votes in an election. Imagine what would have happened if the Government had sold this wheat and flour to any other country but mainland China. The Acting Prime Minister would have made a special statement claiming credit for himself and the Government for this big sale, which is the largest single sale we have made since World War I.

There is no doubt that it pays to be honest and realistic about trade. We have to sell what we can, where we can, and to whomever we can, provided they have the money to pay for it. Why should we worry about the politics of any other country? We do not accept other people's politics, we do not accept their ideologies, simply because we trade with them. If it is going to benefit Australians, and particularly the primary producers, we should openly go in the front door, as I said before, instead of sneaking around to the back. Not one of the Country Party members, not even the one-track-minded member for Hume (Mr. Anderson), has been game enough to get up in this House, despite the red bogys which are introduced by members on the other side, and voice a protest about this trade being initiated with mainland China.

Mr Turnbull - Of course not. We believe in it.

Mr COPE - You believe in it?

Mr Turnbull - Of course we do.

Mr COPE - Listen to that, Mr.Speaker. They believe in this trade. We believe in it too, but when we say so we are classed as commos and fellow travellers. We hear honorable members on the other side of me House, including the honorable member for Moreton (Mr. Killen) and the honorable member for Mackellar (Mr. Wentworth), protesting about trade with red China, but do any Country Party members support the views of those two men? Of course they do not, because they know that they would lose the support of the farmers and graziers if they did so.

I have here some interesting trade balance figures, which were supplied by the Commonwealth Statistician, Mr. Carver. They cover the five and a half year period from 1st July, 1955, to 31st December, 1960, and show that our unfavorable trade balances with various countries were as follows: - United Kingdom, £402,000,000, or an average deficit of £73.000,000 a year in that period; United States, £331,000,000, or an average annual deficit of £63,000,000, giving the United States a favorable trade balance with Australia of two to one. I might add that these amounts which I am quoting do not include freights and other invisibles, which account for large sums paid to these two countries. We had an unfavorable trade balance of £80.000,000 with Canada in the same period, or an annual average of £13,000,000, giving Canada also a favorable balance of two to one. Our exports to British North Borneo over the same period amounted to less than £7.000,000 worth, but our imports from that country were worth nearly £80,000.000, an unfavorable balance of about £73,000.000. the trade exchange being thirteen to one in British North Borneo's favour.

My motive in giving these figures is to point out the one-sidedness of our trade with these countries. Honorable members will recall that when the Minister for Trade (Mr. McEwen) introduced the Japanese Trade Agreement in this House a few years ago he said that because Japan was one of our best customers we must buy more goods from that country. Somewhat the same principle could be applied to the countries I have mentioned, which have such favorable trade balances with Australia. I believe, Mr. Speaker, that the Acting Prime Minister and Minister for Trade should tell those countries - the United Kingdom, the United States of America, British North Borneo and Canada - in accordance with the principle that he expressed when he introduced the Japanese Trade Agreement, that unless they buy more from us we will be forced to buy less from them.

It has been mentioned that many of the goods that we buy from those countries are essentials. That is a fact, but not all of them are essentials. About 20 per cent, of them are not essential. Leaving that particular argument, let us get back to the Japanese trade treaty. Japan does not buy our wool simply for sentimental reasons. It buys our wool because it is essential to its economy as a raw material for the manufacture of exports.

Mr Turnbull - Are you against the Japanese Trade Agreement?

Mr COPE - I am not talking about the agreement. I am giving an analysis.

Mr Turnbull - Are you against the agreement?

Mr COPE - If the honorable gentleman is so gullible as to believe stories like that he must be softer than sorghum. I am trying to state the argument that was used for the introduction of the Japanese Trade Agreement. The point is that Japan was buying Australian goods because it needed them. We are buying goods from the United States of America and the United Kingdom because we need them. Should we not apply the same principle to these countries as was applied to Japan? Is any one in this House so n:ive as to believe that Japan would buy our wool if it could buy similar quality elsewhere more cheaply? Should we not say to the United

States of America, " Unless you buy more from us we are certainly going to buy less from you "?

The Labour Opposition, at various times, has been accused of not having any constructive suggestions but I believe that the Leader of the- Opposition has been quite constructive in stating what should have been done to conserve our overseas credit balances upon which our standard of living depends. He said, time after time, that to conserve our overseas credit balances we must have selective import control and that we must manufacture more goods in order to make us less dependent on overseas countries. In a cheer-chasing speech the Minister for Trade said last year - he also said it in the two previous years and we are forecasting that he will say it again this year - that the United States was being vary unfair to us. He was reported as having told members of the AustralianAmerican Association on 24th February last that no great trading nation had obstructed Australia's battle for overseas trade in the past eight years more than had the United States.

We buy many commodities from the United States which has a favorable trade balance with us on a two to one basis. Does the United States of America reciprocate? Certainly not. It has a prohibitive tariff on Australian wool. This prevents Australian wool from going into American markets and is designed, no doubt, to protect American synthetic industries. I believe that this is not a time for cheerchasing, empty speeches. This is a time for action and realism. We must tell these people who are living on the backs of Australians that they have to be fair to us and buy more from us. If they do not, we will have to buy less from them.

In the few minutes remaining to me, I should like to refer to the credit squeeze which is having a great effect on many industries rn my electorate. Several big industries are retrenching staff and working short time. Chattanooga Tufted Carpets (Australia) Proprietary Limited, a subsidiary of Felt and Textiles of Australia Limited, is sacking men and is working on a skeleton staff due to the credit squeeze and imported carpets. Standard Telephones and Cables Proprietary Limited is retrenching men as are Australian Paper Manufacturers Limited and Austral Bronze Company Proprietary Limited. Other employees are working short time. It has often been mentioned that the reason for the credit squeeze is inflation. Now it is said that the inflationary trend is due to the rise in the workers' wages. Let me quote what one very great economist said -

Many people go as far as saying that the Arbitration Court judgment is responsible for this inflation. I would like to point out, however, that whilst this move is inflationary, it is not the cause of the inflation, but merely the result of inflation.

Do you know who the economist was? None other than the honorable member for Richmond (Mr. Anthony). His statement was reported in the " Northern Star ". published in Lismore. The honorable member is not here at the present time, but his statement indicates that even some Country Party members know that the workers' wages are not responsible for inflation. We cannot compete on world markets because our costs are so high. That state of affairs has been initiated, condoned and encouraged by this Government. Inflation we have, but it certainly is not a workers' inflation; it is a profit inflation which has caused the reduction of overseas credit reserves and the economic instability that we have in Australia to-day.

Suggest corrections