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Wednesday, 3 April 1957

Mr DRUMMOND - I am sorry, but 1 never hear interjections. The process that I have described is an ordinary process of business. You may have a bright idea anil want to start a factory. You have certain assets which you want to develop, and you seek the assistance of a financial institution for that reason. If. instead of being a person, you are a country with great undeveloped assets, and great and pressing reasons for developing them which have nothing to do with personal glorification or pelf, you seek those who are able to lend you the means to develop your assets. We know perfectly well that today, whatever might have happened in the days far distant, when you borrow you borrow not money but the things that money buys in the country that makes the loan. This legislation states specifically what this particular loan is to be expended on. 1 would say to my honorable friend opposite, the honorable member for Yarra, that if he looks back into history - a subject on which, no doubt, he is far better informed than I am - he will find that the United States, right up to the end of World War I., and, I think, for some time afterwards, was a debtor nation. America, with its tremendous assets, being a country far more richly endowed than Australia is, liquidated its burden of debt by the speedy development of its assets over a long period of years. How, in the name of goodness, can we develop this asset of Australia if we do not seek from those who have then the wherewithal and the means of development? We have done that.

The honorable member for Corangamite or the honorable member for Wannon dealt with the question of the uses to which we could put the finance obtained. I do not want to traverse that matter, but 1 wish to say that if we. are going to develop this country we have to use the same means as America used. If we have a friendly lender we must use the services of that lender to help us with our development. I think it was the honorable member for Melbourne Ports who referred to the Canadian position. I am not as well informed on the subject as he is, but I know that the conclusion that was arrived at by the various sections of the Canadian people who went into this matter was that, on balance, Canada had benefited from the tremendous inflow of capital from the United States, and that they shrank away from any proposal to put a clamp on that which was developing Canada's assets. I remind the House, in all seriousness, that in Europe even countries which have been hereditary enemies, hitherto bent on destroying one another, have come together to pool their assets and strengthen their economies. I mention that because I think that in this age one must have a wide vision. We have shown it ourselves in the Colombo plan. One must look beyond the mere boundaries between, say. the United States and Canada and, certainly, between the United States and Australia. The resources of the world should be marshalled, not as a means by which the United States can squeeze, say, Australia or Canada; but for the common use and benefit of humanity. Any contrary idea is as out-dated and outrageous as the robber baron approach of simply killing a neighbour and taking away his gold ducats - though such a course of action might have had more validity then than now.

The honorable member for Corangamite (Mr. Mackinnon) referred to the way in which our war-time economy was conducted. The government of the day, quite rightly, clamped down on the investment of money and thereby not only prevented inflation but also made it extremely easy to get, without excessive interest commitments, the money that it needed for its war loans. I think that such action serves no very good purpose in peace-time, and an economist such as the honorable member for Yarra (Mr. Cairns), although he may not agree with my philosophy, will know that what I am saying is plain fact. We are living through a period in which we are trying to ensure a reasonable amount of personal freedom of action. One of the prices of that freedom is that we cannot close down on the money market without creating distortions that may outweigh by far the benefit obtained. Even conservative governments in Great Britain have used the weapon of closing the money market to outside investment in order to fill government loans on suitable terms. Indeed, all governments use this device in time of crisis, but I do not think we would be justified in using it at present.

The Deputy Leader of the Opposition, the honorable member for Melbourne (Mr. Calwell), enumerated several points which he described as vital. He said that external borrowing could be avoided if overseas firms came into the country, bringing their assets with them, and developed factories. A great deal has been done in that regard, but we cannot expect private capital to come in unless we can offer constitutional security, which is available only in the Commonwealth sphere at the present time. The Commonwealth Constitution lays down thai if a property is acquired for the purposes of the Commonwealth, such acquisition must take place on just terms. Unfortunately, the States are not so bound. I do not intend to discuss whether the Commonwealth or a State is justified in acquiring, nationalizing or anything of that kind. In the final analysis that is a matter for the people, through a responsible government. I merely suggest that any one who is invited or encouraged to come here should be assured that if it is necessary in the public interest to take over his property it shall be done on what reasonable men understand as " just terms ".

I want to refer briefly to the purposes for which this loan is being raised. We have already discussed the raising of money for the purposes of the aviation industry of this country, and I do not propose to traverse that subject further. A year or two ago a well-known Australian arranged for a certain Canadian firm to come here and develop one of our greatest national assets on certain terms. First, the firm would prepare the plan and accept the recognized fee. Secondly, if desired, it would supervise the work, again for a fee. Thirdly, it could carry out the work, bringing with it the whole of the machinery, equipment, employees and houses required. The only call upon the economy of the country would have been for food, services and clothes. Whilst a project handled in this manner would not be as inflationary as would perhaps action in other directions, there would be a call upon our resources for education, health, food and clothing, and to the extent that these might be in short supply there would be a certain inflationary effect. I leave it to my friends, the economists, to correct me if that is not a fair assessment of the position. 1 thoroughly agree that it would have been the right thing to do, but, unfortunately, because of the different view of the State concerned, it was not carried into effect. I think that it would be one of the important things which could be done materially to assist us in handling our own immigration policy and to enable us to absorb more and more people without affecting, in any serious way, our standard of living.

T want to correct one statement that has been made. I am sorry that the honorable member for Melbourne (Mr. Calwell) is not here because I would prefer to say this in his presence. He referred to the fact that a certain amount of money was being allocated for the purposes of the railways and for the purchase of diesel-electric locomotives. He said, quite rightly, that they are being constructed in this country. But he overlooked the fact that over £20.000,000 has been allocated for the modernization of railways up to the present time. A large proportion of that money has been used to pay for components for dieselelectric locomotives, not for the locomotives themselves. In other words, as in many other fields, we have to import a substantial quantity of material, partly raw, partly manufactured, and sometimes wholly manufactured, in order to enable us to operate our secondary industries effectively.

In time to come, we shall more and more overcome that disability; but the fact remains that even when we achieve a high state of industrial development, we shall still find that it will pay us to get certain specialized components or specialized machines from outside Australia. That is a very good thing from the world point of view, lt makes for multi-lateral trade between countries. We need to trade with other countries and as long as we have substantially the basis for the development of our own economy, we shall be able to meet a crisis of the kind which we could not meet in the 1930's because our secondary industries had not developed to the point at which we could cope with many of the troubles which arose. Our position is much better to-day. Subject to what 1 have said, I think that we would not be well advised uneconomically to develop the production of things which are not used in great quantities in Australia.

I want to congratulate the Government in general, and the Treasurer in particular, on the fact that a certain amount of imports, including goods purchased with the sum of 75,000,000 dollars, comprises those things which can develop the industries of the land. We have learned anew, in a dramatic fashion, just what the Commonwealth Scientific and Industrial Research Organization has done for the wool industry. The rise in the price of wool has assisted Australia out of what could have been an extremely dangerous position. 1 think the Government is to be commended on its statesmanlike approach to the matter of primary industry, and on its taxing policy and borrowing policy which enables the Government to provide the means to increase production and to get it back by way of increased. receipts from taxation. Therefore. I have much pleasure in supporting the bill and commending it to the House.

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