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Wednesday, 1 May 1957

Mr CALWELL (Melbourne) .- This agreement has been presented to this House as a matter of very great importance to this country. It follows the illfated Ottawa Agreement. The Ottawa Agreement was of no use to Australia except in the early stages of its operation. In the days when it was of some value, our primary industries were in a state of almost chronic impecuniosity. Wheat was being sold at something like ls. 3d. a bushel and wool at between 7d. and lOd. a lb. It was of some value to the Australian primary producer to get a market somewhere in the world to return him something better than he was receiving locally under the existing schemes of marketing in those days. I can remember in the early days of the war everybody thought that the Menzies Government had made a remarkably good deal with the British Government when it sold the whole of the Australian wool clip at 13d. a lb. But when the Curtin Government came into office about two or threeyears after that agreement was made, everybody thought that Australia made a remarkably good deal when the price of wool was lifted from 13d. to 15d. a lb. Whereas in. the early days of the Ottawa Agreement primary goods were being sold for less than the cost of production, 13d. a lb. was the guaranteed price for all the wool that was brought on to the market, and that was considered to be a great thing for Australia. Because that price was above the cost of production some people in the primary industries were encouraged to think that Australia was getting out of the doldrums.

Then came the post-war period and,, thanks to the United Nations organization, Unesco and other organizations associated' with the parent body, efforts were made toincrease the standard of living of Asian peoples and those in undeveloped countries, generally. As a consequence, the demand for wool grew and also the demand for wheat. These are the two great primary industries from which Australia has alwaysderived a great proportion of its export income, and we were glad when prices for those products rose. Of course, Australia benefited from the Korean War situation also. One man's meat is another man'spoison, and so when the nations started stock-piling wool against the prospect of a world war, the price of wool rose further. Wool is still selling at very high prices, and! it is the one industry in which the product is sold on the open market. It does not receive government support and it is not sold under any organized marketing schemes. I think the wool producers havebeen well advised to keep the selling of their product on a free and open market.

The Government is claiming certain credit, to which I think it is not entitled, for the good export prices that are obtained. Wool still represents 46 per cent, of Australia's exports. That is a very big proportion of the total. I should like to believe that a great field is opened for Australia in< respect of secondary production, and that we can sell a lot of steel throughout the world, and motor cars also. I know that at this moment Australian wool is bringing, high prices and that we are increasing our exports of motor cars and steel, but the markets for Australian eggs and meat have practically disappeared. Some honorable members may disagree with that statement but I notice that the meat industry is trying to encourage people to have meat breakfasts again. They think that the chop and the piece of steak should replace the egg and bacon and cereals. People are unable to buy much meat on the home market. The price is so high that it cannot be sold as freely as previously on overseas markets.

It is easy to make out a case for the Government about the great value of Australian exports and to say that export markets have reached stability. I think that yesterday the Premier of Victoria was foolish enough to say, when the basic wage decision was announced, that Victoria had now reached a state of economic stability. I would be happy if I felt that economic stability could be reached in Australia within the next 20 or 30 years. What is happening is that the Australian economy is expanding rapidly. Population is increasing and immigrants who arrive from abroad and children being born to Australian parents are making increasing demands upon the economy. Australia is developing faster than in the years intervening between the two world wars and faster than in any other period, except that of the gold rushes and in the 1870's and 1880's, when many immigrants came to this country.

Because of these increased demands we shall be living in a period of inflation for some time to come. I would rather have a calculated plan involving some inflation than not have the economy of this country developed and its industries expanded. To the extent that this Government has helped to develop and expand the Australian economy, it is entitled to credit, but there is another side to the picture, and that is where the Opposition can make a good case against the Government. The Australian economy to-day has reached some sort of stability only because of the imposition of import restrictions and a bank credit policy, both of which are bearing severely on sectors of our economy, and both of which are being resented greatly and increasingly by many people throughout Australia. It is idle to suggest that these measures are only temporary. I think we have all got what Carlisle would have called a preternatural suspicion that they will last much longer than we think and that they will continue to bear very heavily upon great sections of the Australian people for a long time to come. No one can deny that if import restrictions and bank credit restrictions were lifted we would have industrial chaos and mass unemployment, with all the attendant social miseries. No one can allow that to happen, therefore the Government must tackle the problem of inflation by some other means. I believe that the Minister did his best in London, but I also believe that British negotiators are always too tough, too experienced and too selfish towards their Australian opposite numbers.

Mr Duthie - Some of them still think that we are colonials!

Mr CALWELL - The colonial outlook still dominates the minds of some English statesmen. They think that this country should be used to keep their own country going. They even resented our asking for a review of the Ottawa Agreement.

Mr Luchetti - The Minister has not the support of even his own colleagues.

Mr CALWELL - They are supporting him, but they are not so confident that all that he is doing is right. We should have denounced the Ottawa Agreement and started afresh. Although it was advantageous for primary industry in the early days, back around 1932, over the years this advantage has substantially declined. In some instances, of course, protection was not so greatly needed. Certainly, the advantage to the British manufacturers has grown with the passage of the years. In the last few years the benefit to the Australian primary producer under the Ottawa Agreement has amounted to about £8,000,000 annually, but the advantage to the British manufacturer exporting to Australia has been more than £100,000,000 a year.

The Labour party does not believe that the new agreement will alter the present position very much. As the honorable member for Lalor (Mr. Pollard) saidin opening the debate for the Opposition,there is too much mention of hope and expectation. On such things one cannot base an agreement upon which, in turn, a policy is founded.It is suggested of course, that if there is disagreement there willbeconferences. They will beheldinLondonno doubt in thenorthernsummer, with some peoplehavingan enjoyable winter cruise from Australia, but I am sure that, as the other side will have the backing of the British Foreign Office, the Board of Trade, the shipping companies and all the forces that the mass wealth of England controls, the result will be to our disadvantage rather than to our advantage. In this matter we do not bargain as between equals, and I feel that we must try to become as tough as the British and point out that it is not to their ultimate advantage to behave as they arc doing at present. We should tell them that they must get their shipping freights down. They should not expect all the advantages.

Geographically, we ought to be extending our trade with Asia, where new markets are available. Some Asian countries are buying wool from us but can sell very little themselves on the Australian market. We must also face the fact that in Europe an economic union is in process of formation. 1 think that will be very good for the countries concerned. It will lower costs, because customs duties are invariably included in the cost to the consumer. It will also reduce the kind of competition which, allied with a fierce nationalism, can bring nations to the verge of war, or even into war. The freer trade between nations of the world is, the greater will be the contribution towards world peace.

Mr Turnbull - The honorable member is a great supporter of the General Agreement on Tariffs and Trade.

Mr CALWELL - I believe in making trade free. That is why I supported the establishment of Gatt by the Chifley Government. The United Kingdom will ultimately be obliged to join the European economic union, and that will be greatly to its advantage. It would be very foolish if it did not do so. It would be missing a market that is now denied to it because of the operation of high tariffs. The Labour party does not believe in high tariffs just for the sake of having high tariffs. We want them only for the purpose of protecting our own industries against unfair competition and to protect nascent industries. I have a suspicion that a number of manufacturers take full advantage of the tariff and charge every penny that they possibly can, right up to the limit permitted by the tariff wall. The Labour party does not believe that that should happen. It is not good for Australia.

Britain has to decide whether it will be part of a great Commonwealth, as well as part of a European economic union. As I see the world to-day, there are only two great powers, and the rest of us have to be on one side or the other - with the United States of America or with the Union of Soviet Socialist Republics. The influence of Europe in international affairs is waning for two reasons. It is waning firstly because America is the greatest power in that European-American area and, secondly, because there is a rising nationalist and economic expansionist policy operating in every Asian country. The only hope that Europe has of recovering its former position is to establish this economic union which will ultimately result in the establishment of a United States of Europe. That may be only an idle dream at the moment but I think that it must come and I think that when it comes it will work for world stability.

We must try to get costs down and increase productivity in this country. We must have greater efficiency in all walks of life, and in all the processes of production, distribution and exchange. However, I fear that if to-morrow we said to our manufacturers and importers, " You can import anything that you like ", we would have a flood of goods the value of which would be much higher than £775,000,000, which is the Government's present limit. We would be back where we were in 1952 or thereabouts. We would have more than £1,000,000,000 worth of goods coming in each year. Of course, we have not, at present, the exports with which to pay for such a great influx of goods. In 1952 a great amount of cheap goods came into Australia, which was being used by some countries for the dumping of surpluses. Many of the British goods that were brought in were sold at exorbitant prices. Such is the lack of a spirit of real nationalism amongst our own people that there are still many Australians who will only buy something that has been made in another country because they believe that it must, of necessity, be better than anything that is produced here. I do not think that that is either wise or correct.

I hope that the Government will not be satisfied with what it has done so far. The Opposition will not oppose the approval of the agreement. We have our doubts about it and will certainly have something to say about some of the tariff bills that will be brought down to implement it. It is idle for Government members to indulge in wishful thinking and spread propaganda that suits their case. Every one in this country has faith in the future of Australia. Any one who did not would not be a good Australian. We all know the difficulties that face us. We all know what we would like to do, and what the people who went before us have tried to do. Faith in Australia's future is not the possession of any one part or section of the Australian people. The Government should not prop up the economy by artificial means - by import restrictions more severe than those brought about by enemy action in the worst days of the war. When the Minister next goes overseas, or has an opportunity to speak to the United Kingdom High Commissioner, he should say that this agreement has had a mixed reception in Australia. We are critical not so much of the Minister as of the people with whom he had to deal. We want a better agreement for the benefit of the Australian people, because all of us benefit from stability. None of us wants to see either of the twin evils, inflation or deflation, abroad in this country again, because both are cumulative in their ill effects.

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