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Thursday, 16 May 1957

Mr McEWEN (Murray) (Minister for Trade) . - The honorable member for Yarra (Mr. Cairns) has raised a general subject-matter of great public interest and an issue which, in its very character, is an irritant over a wide area of the community. This is not the first time I have made that statement. I have made it repeatedly. Acknowledging that this matter involves an administrative procedure that is, in its nature as a control, a restriction of the freedom of individuals, and bound to irritate, I have said that I, the officers of the department, and the Government, will never at any time regard the system as perfect, but will always be endeavouring to improve it. I have said before that it is a system in which injustices can occur, or can be believed to occur; and in that situation that I would never resent criticism, because I can think of no better way to ensure the production of evidence of injustice and the correction of the perpetuation of injustice than free and open criticism in the Parliament. This would confront me, as Minister, with the necessity either to justify what has been done, or to improve the procedure and correct injustices. I have made that statement before, and I repeat it.

I have listened carefully to the statements by the honorable member for Yarra. Frankly, what he had to say amounted to little more -than a long series of allegations unsupported by any evidence. That is the simple truth. It was a long series of allegations in which the honorable member pur ported to read an observation or a criticism by some third party whom he did not name. No weight can be attached to criticism by an honorable member who is unwilling to name the original critic. The only authority that the honorable member gave for any observation he made was, I think, a quotation from the " Financial Times ".

Mr Cairns - Do you deny what was said?

Mr McEWEN - Yes, I find it almost automatic to deny nearly everything that the honorable member for Yarra says.

Mr Cairns - Even if it is true, you deny it?

Mr McEWEN - I have had that experience only on the most rare occasions. The simple fact of the matter is that the accounts of the nation in overseas currency are just as rigid as the bank account of an individual. The nation can no more overdraw its reserves or credits in overseas currency without going bankrupt than an individual can overdraw his bank account beyond the scope of any arrangement he may have with his bank without going bankrupt. The whole nation may as well get used to that idea and it is, I think, broadly accepted to-day. As I have said before, there are devices by which nations can restrict the import demands of their communities other than by this physical operation of import licensing. Indeed, the alternative devices are those that are most broadly used by other countries, in policies of internal deflation and credit restriction, and a variety of other means, including punitive taxation; so that, in the result, the community is brought to a position in which it is not able, or not willing, to buy from overseas more than it can pay for from its overseas currencies at its command. That is the practice followed by most countries. It is not the practice that the Government of this country has considered to be the most appropriate to Australia's circumstances. The Government of this country does not want to deflate, to dampen down and reduce the purchasing power of the community. The whole general policy purpose of this Government is to stimulate development, to stimulate industry and to produce prosperity; and out of those ingredients you do get a desire and, in your own currency, an ability to import - I repeat, in your own currency, an ability to import. We believe that no one in this Parliament or outside it, with all the criticisms of import licensing that have been offered, has said that there should be no attempt to equate our imports to our capacity to pay for them. As far as I am aware, no one in this Parliament or outside of it has suggested an alternative approach to this subject or to the acceptance of the situation which produces the difficulties associated with the physical control of import licensing. The honorable member for Yarra quoted me quite correctly, because he read from the " Hansard " report of my speech. I said that we had import licensing for the protection of our overseas reserves, administered in such a manner as to give priority to essential things. Am I to understand that the honorable member for Yarra, or any other member of the Labour party, thinks that whatever funds we have to spend should be permitted to be spent without any regard for the essential requirements of this country? Unless he means that, he does not mean anything.

Mr Cairns - I rise to order. The matter raised before the House this morning relates to the efficiency of the procedures adopted by the Department of Trade, not to whether the controls should be applied in one way or another. I suggest that the Minister is out of order, because he is not discussing the matter before the House.


I rule that the Minister is in order.

Mr Wilson - Mr. Acting Deputy Speaker, on the point of order-


Order! The point of order has been disposed of.

Mr McEWEN - We have a problem. It is an extreme problem, in this sense-

Mr Ward - Mr. Acting Deputy Speaker, I direct your attention to the state of the House.

Mr Osborne - Do honorable members opposite want this matter to be discussed or not?

Mr Ward - Yes, but we want the matter raised by the honorable member for Yarra to be discussed. We do not want this tripey statement by the Minister for Trade.

Mr Cairns - Why does not the Minister for Trade answer the criticisms that are made?

Mr Osborne - Honorable members opposite are stifling discussion.

Mr Curtin - The Government is corrupt.

Mr Mackinnon - The honorable member's party knows all about corruption.


Order! The honorable member for Kingsford-Smith might find it profitable not to make observations of that kind.

Mr Ward - Even though they might be true?


Order! The honorable member for East Sydney might also take notice of my warning. [Quorum formed.]

Mr McEWEN - The honorable member for Yarra said, in fairly explicit terms, that the accounting system of import licensing-

Mr Curtin - I rise to order.

Mr McEwen - Honorable members opposite cannot take it.

Mr Curtin - Mr. Acting Deputy Speaker, may I ask your ruling on whether the word " corrupt " is an unparliamentary word?


Order! An imputation of corrupt practices against the Government is unparliamentary.

Mr Wilson - I rise to order. I suggest that the honorable member for KingsfordSmith should be made to withdraw his remark that the Government is corrupt. It is offensive to me and, I am sure, to every member of the Government parties.

Mr ACTING DEPUTY SPEAKER - Order! The episode is closed for the moment.

Mr McEWEN - -The honorable member for Yarra sought to compare the accounting system of import licensing with the accounting system of a bank or a retail store. That shows the profundity of his ignorance of this subject. Accounting in commercial practice is accounting in respect of known facts. Accounting in respect of import licensing is accounting ,to a large extent, in respect of imponderables. Import licences are issued and are valid for a year, but no licensee is compelled to use his licence. So, for a start, it is not known how many of the import licences issued will, in fact, be used. On an average, licences to the value of £100 issued on a c.i.f.e. basis result in imports to the value of £85 on a f.o.b. basis. The difference includes freight, insurance and unused licences. Sometimes one of these elements is higher than the others and sometimes lower. There has to be an element of calculated guesswork, based on records and experience. For commercial reasons, a licence is issued and is valid for a year, but almost every licence straddles two financial years and no one knows in which of the two financial years the licence will be presented and the overseas funds, drawn upon. There again, in calculations and recordings for this purpose there is, inevitably, an element of estimation. To compare this system with the simplicity of keeping bank accounts is just utter nonsense. In a system where the demand for goods fluctuates from time to time and the operative decision is not with the Government but with the commercial interest which holds the licence, there is an element of unpredictability in the calculations. As is well known, that has resulted in the actual expenditure, on occasions, being greater than that which, at an earlier period, had been estimated. I can say, however, that to-day with the financial year drawing fairly near to its close, the Department of Trade is confident that the actual expenditure will very closely approximate the authorized expenditure - more closely than ever before.

Import licensing is a prodigious business, with 600,000 licences current at one time. Sometimes thousands of applications are received in a week. The Government hoped, as I believe the whole community hoped, that this would not be a permanent or a very long-enduring feature of our national life, so there was not constructed a whole permanent apparatus at the outset, involving all the expenditure that would go with it; such as would be justified in the case of something permanent in the life of the community. I make no apology for that. I would find myself obliged to apologize if the Government had, at the outset of licensing, established an extensive and expensive structure and then had discovered that, as a result of a fortuitous increase in the price of wool, the whole thing had to be wiped out in a year.

But the Government has been prudent in this matter. When the department that I administer found itself in control of import licensing, the very first thing that its responsible officers did was to ask the Public Service Board, which is the expert authority on administration, to go into the matter of an export licensing system and advise the department what could be done to improve, if not to perfect, the administration and accounting procedures. Am I to be told that a back-bench member of the Labour party knows more about what ought to be done in this very technical matter than do the highly-trained specialists of the Commonwealth Government, whose function is to advise and study such matters, both here and overseas? That is what is being done, and the results that have flowed from it speak for themselves. A few months ago there were, I think, 3,000 applications for licences undecided, but a week or two ago there were only 700 applications undecided.

Mr ACTING DEPUTY SPEAKER - Order! The Minister's time has expired.

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