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Tuesday, 23 October 1956

Mr MACKINNON (Corangamite) . - The bill before the House, which is designed to facilitate government borrowing, particularly in other countries, seems to have stirred up Opposition members, who have declared themselves as being opposed altogether to overseas borrowing. Irrespective of the actual contents of the bill, I think that the arguments submitted so far by honorable members opposite have been to the general effect that Australia should never borrow from overseas countries. Everybody will agree, irrespective of his 'political creed, that in these times of vast Australian development we cannot, with our limited resources, provide sufficient capital ourselves. We must, therefore, look outside for capital. In the past we have relied largely on support from the Mother Country, and I believe that most of us would wish that we could continue to rely on her, because of the natural ties of family and affection. Unfortunately, due to Great Britain's economic situation after waging two- world wars, that country is no longer in a position to supply to Australia and other units of the British Commonwealth of Nations the necessary finance to carry on their development. Australia must, perforce, look elsewhere for the capital resources that are needed.

One of the most extraordinary remarks made by the honorable member for Scullin (Mr. Peters) was that he has been unable to see any results from the loans that this Government has already raised in dollars and Swiss francs. It is quite obvious, despite the fact that he professes to know a good deal about primary industry - in fact, I sometimes think that he is the Labour mouthpiece on primary industry - that he has not travelled around Australia and seen the great volume of agricultural machinery, which is not manufactured in Australia and is unprocurable in this country or from sterling sources, which is being made available to Australia because of these dollar loans. Not only has agricultural machinery, in which I take a personal interest, been made available, but so also has the great amount of heavy earth-moving machinery that is doing a magnificent job in our hydroelectric and other developmental schemes, such as that being undertaken by the Snowy Mountains Authority. It seems most extraordinary that honorable members opposite should adopt this attitude in regard to what is really the life-blood of Australia's developmental programmes, and that they should take the parochial view that we should limit our financial requirements to the availability of capital in Australia.

I turn now to the question of why the Labour party is traditionally inclined to reject foreign borrowing. The first time that a Labour government had the opportunity of borrowing overseas was in the 30's. During that period, if my memory serves me well, the Premier of New South Wales, who, I think, was a Mr. Lang, so blotted Australia's copy-book with regard to overseas credits that it was quite impossible for a Labour government or any government at that time to present a credit-worthy scheme so that overseas lenders would be prepared to meet Australian requirements. When the present Opposition was in government, during World War II., virtually no international financial transactions took place. Because the requirements of Australia, which were admittedly vast, were limited to the war effort, and because certain legislation was in force, it was unnecessary to try to borow capital overseas, despite the fact, as many will know, that commitments were made in the financing of our war effort overseas, especially in such parts of the world as the Middle East and Southeast Asia. Because of the strangulation of opportunities for investment outside the normal government requirements, it was virtually impossible for a private individual to adopt any other form of investment, so money was readily available for government loans. I have only to refer to a few of the acts and regulations that were in operation in those years to show how easy it was for the government, under those conditions, to make certain that the loans required for the carrying on of its capital works programme were filled. Prices were pegged on the stock exchange. It was impossible to do much in the way of normal transactions in stocks and shares. We had capital issues control. In other words, there were no avenues for vast sums of investment in private or public companies without Treasury approval. Land values were pegged so that people could not buy land as an investment. If the price exceeded a certain level, the sale would not be allowed by the delegate to the Treasurer. Again, mortgages on land had to be approved by the Treasury before loans could be made available. The whole of investment was so tied up that it was unnecessary for the Labour Government to borrow overseas. It did not require to borrow money from that source.

I think that members of the Opposition have also had, traditionally, a fear of bigmoneyed interests. This is a sort of ghost that lurks behind their bed at night - big-money interests which dominate the economy of Australia. When one examines the general development of international relations, it is quite obvious that that type of argument is completely useless in the development of a modern State. The modern State is dominated by its own political wishes. It can dominate its own economy at any time it desires. Only recently, we have seen specific examples of that type of thing.

When we get down to the criticisms that have been made in regard to this bill, we realize that they have not been based merely on the content of the bill itself which, as I mentioned previously, is designed to streamline the facilities available for bor.howing with the Government's approval and within the Constitution. They have been based on the complete rejection of the principle of borrowing from overseas countries. I suggest to this House that unless we can provide from our own resources the capital required for development, or procure the capital from the normal sources that we enjoyed before the war, such as those in the United Kingdom, we must take every opportunity that we can to carry on development here by exploring every benefit that is available.

The honorable member for Scullin (Mr. Peters) talked about the emu putting his head in the sand when he meant to refer to the ostrich. I think that that is the background of the whole outlook on this subject. If we believe that this country has a future, if we have confidence in the future of the people who make up the population of Australia, if we believe that we can express our thoroughness and ability to carry on the development of this country to the other people of the world who are in the position of lenders, and if we can tell them that we in Australia are going to be a bastion or right thinking in the world* I am satisfied that we need have no fear in borrowing overseas. We shall carry out our obligations. We shall keep Australian credit high and we shall act for the advancement of this country.

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