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Tuesday, 26 March 1957

Mr IAN ALLAN (Gwydir) .- I listened with some interest to the GovernorGeneral's Speech in opening this Parliament last week and take this opportunity of congratulating the Government upon its record, as reflected in that Speech. When we consider the pressures that have been brought to bear against this Government by selfish interests and all the storms - caused chiefly by political unionism - that it has had to ride out, we can gauge the extent of its success in guiding the economy of this country over the last six or seven years. However, 1 was disappointed at the absence of a challenging, forward-looking policy. I was disturbed because I believe that unless we have forward planning in this country the economy will remain in the present precarious state.

The prime example of this hand-to-mouth planning is to be found in the policy of import restriction. To my mind, import restrictions create a topsy-turvy financial system. The truth is that our balance of payments position has occurred, not because we are buying too much, or wish to buy too much, from overseas but because we cannot sell enough overseas. To close the door against imports from other countries will only make the last position worse than the first, because there is a great deal of money in circulation in this community that otherwise would have gone overseas. That has led to the reckless expansion of manufacturing industries in the cities. It has created a spurious atmosphere of prosperity in the industrial centres and is making it harder than ever for us to export overseas to secure our balance of payments in the long run.

I have some figures to indicate the extent of the damage that is being done by the policy of import restrictions. It has been estimated that we are keeping some £210,000.000 in this country which otherwise would have gone overseas. That £210.000,000 is being used by local manufacturers to jack up prices and to make it harder for our export industries to meet world parity with their commodities. That is an extremely dangerous policy to pursue. and the sooner we can get rid of import restrictions the better it will be for all of us in this country. When we consider the sale of our exports, we must consider only the great primary industries. No matter how much noise we make about the success of our manufactured goods in foreign markets, it does not take very much reflection to realize that in this country, where we have to import our fuel supplies, where we are net importers of base metals, and where we have such a very high cost structure, we cannot export manufactured goods against competition in the world's markets from low-cost countries such as Japan. Germany and, for that matter, Great Britain. In the long term, we must go back to our great primary industries. Wool, wheat and meat are our principal commodities and will remain the principal stays of our economy for many years to come.

What are we doing in a positive sense to correct this adverse balance of payments? I believe we are doing so little that it makes no difference. We have no really concrete policy, apart from the negative one of giving taxation concessions to primary producers. We have no positive policy to stimulate the export of primary goods. There we have a paradox. We must depend, in the ultimate, on primary production for our security, our welfare and the maintenance of our standards in this country; yet we are doing virtually nothing to build up our exports of primary products. The tragic position of the primary industries is illustrated by the figures showing the estimates of national income. From the financial year 1948-49 to the financial year 1955-56, wages and salaries rose by 142 per cent.; the incomes of unincorporated businesses, professional people and so on rose by 130 per cent.; incomes from dividends rose by 130 per cent.; other personal incomes rose by 170 per cent.; but the income of farmers rose by a fractional 25 per cent. There is no reason to assume that primary producers are any different from other people in the community. Even cranks who style themselves democratic socialists believe in the profit motive. If we do not give the primary producer an adequate profit, we cannot expect him to produce. There will be no great development of our country if there is no profit in it. That is what is happening on the land. The land is stagnating.

There are other factors which I would like to mention, apart from the general rise in costs, promoted by import restrictions, which make it virtually unprofitable to buy land and enter upon any kind of farming. First, there is the burden of freight costs. That is principally a political matter, because the railways in this country are controlled by the State governments. In the old days it was the country lines that were the developmental lines, and the city, to some extent, carried the country. Now the boot is on the other foot. The country is expected to carry the city. In New South Wales the metropolitan trams and buses lose something of the order of £5,000,000 a year. Who pays for that? Not the city dweller, but the country man.

The Minister for Supply (Mr. Beale) mentioned this afternoon that it costs more to bring a load of timber from the northcoast of New South Wales to Sydney than it does to bring a load of timber from Singapore to Sydney. That illustrates the extent of the burden imposed on the country man by railway freights. It affects, not only the primary producers who buy goods from and send goods to the cities, but all those men who are employed in country towns. The coal-miners in one town in my electorate recently worked out that it cost a man and his wife there at least 3s. a day more for the goods they had to buy than it cost the city people. That additional cost resulted from the charge imposed by the State-run railways. That illustrates the extent of the costs that the primary producer and those who work in the country have to bear.

There is another cost besides freight. Discrimination is practiced by manufacturers and distributors of a great number of commodities against the country man. The basic price of the celebrated Holden car, for example, excluding freight, is about £6 higher in the country than in the city. The country man has to pay higher sales tax on it. That practice is widespread. The country man is hit to leg all the time bv the discriminatory practices of manufacturers in the cities. Take the oil companies. In one town in my electorate, the town of Inverell, in which I live, we pay lid. a gallon more for petrol than is paid in Brisbane. We pay 8d. a gallon more than is paid in Sydney, although it is well known that petrol can be landed in Inverell for less than 5d. a gallon in freight. Petrol is one of the main cost items in the farmer's list. Why should discrimination be practised on a scale such as that? City Labour members know nothing about conditions in the country and they care less.

An additional factor, apart from the costs which the country man finds onerous and burdensome, is the policy of the banks. No one blames the banks for seeking the best possible markets for their money. They are business houses. But the fact is that, owing to a shortage of funds, they are unable to lend adequate amounts to the man on the land to allow him to develop the land properly. He is supposed to live off his own fat and, as I have shown, he has not much fat to live off in these days. Primary industry has been placed right at the end of the line, yet we depend on primary industry to keep the economy afloat. I suggest to the Government that it is high time we had some planning authority which would make sensible plans for the future to raise production and insure this country against the consequences of drought. If we had a drought on the scale of the drought which occurred at the end of the last war. we could lose up to £1,000,000,000 in the next ten years.

We also need to insure against a falling off of production because the rabbit is returning. We must insure also because we cannot guarantee that we shall always receive the prices that we have received in recent years. It is true that this year we have had a bit of a rise. Because the country men worked like beavers and produced a great deal more to sell at a lower price, there has been a rise in the amount of foreign money coming into this country. But one swallow does not make a summer. We could easily go the other way next year if we had a drought or if the prices fell. I put it to the Government that we must have some plan now for the relaxation of import restrictions in order to reduce our cost structure, which should be brought down to world parity as quickly as possible. We must have some plan for the provision of developmental finance. That is not an insuperable problem. Developmental finance is provided on a small scale in a number of countries, and under various schemes it is done particularly in the United States of America and Canada. It is not new. I myself conducted a similar scheme on a very small scale with sugar-farmers years before World War II. What we want is the provision of money for developmental work, and supervision by a new kind of extension officer in order to get new work done.

The mortgage department of the Commonwealth Trading Bank can lend up to only 70 per cent, of the value of the security. The maximum limit of loan and the conditions under which it may be made have not been changed since that department of the bank was established in 1943. lt is high time the Commonwealth Bank Act was amended in order to make ' the mortgage department really a developmental agency.

These problems are not insuperable. 1 would not endeavour to suggest a scheme in detail. I could not do it at the moment. But I believe that there will be very little real trouble so long as we are determined to solve the problem of opening up new land, and increasing the rate of pasture improvement, clearing, and soil, water, and fodder conservation. I am sure it can be done. If we continue at the present rate it will take us 1,000 years to develop Australia properly. We cannot afford to take so long to do the job, for the reason, if for no other, that although our population is increasing very rapidly, that of other countries to the north is increasing much more rapidly. We need to make Australia rich and strong, and our economy robust, and this means that we must undertake developmental work immediately. A programme of the kind that I envisage will cost money, of course. But everything worthwhile costs something. We are spending a great deal of money in our attempt to raise the living standards of the people of Asian countries and of other countries to our immediate north. This is a vain attempt, because the population of those countries is increasing much more rapidly than we are able to develop their resources. If we are spending so much money for that purpose, surely we could spend more to maintain standards in Australia.

I ask the Government to give consideration to this question so that in the months to come we may develop a positive plan to overcome our economic difficulties, and T urge it to grasp the nettle firmly, and to give the people of Australia an inspiring and challenging plan for our country's future development.

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