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Tuesday, 10 November 1959

Mr CALWELL (Melbourne) .- Mr. Speaker,I want to say something at this stage because the session is moving to a close. If the debate is adjourned, there will be no further opportunity for any member of the House to offer any views on what the Treasurer (Mr. Harold Holt) has said, because, when the session ends, the Parliament will be prorogued. This matter will then be finished as far as this Parliament is concerned and so I follow the Treasurer in discussing what is a very important ministerial statement.

The Minister has been abroad attending quite a number of conferences. At least it can be said to his credit that he has come back and reported before the Parliament has concluded its sittings. This is in contra-distinction to the attitude of the Minister for External Affairs (Mr. Casey), who seems to be as elusive as is a certain gentleman who has engaged attention in New South Wales over these last few weeks and whose whereabouts cannot be ascertained with any precision.

The Treasurer has dealt with quite a number of questions. He has not merely covered the technical side of his discussions with the representatives of the International Bank for Reconstruction and Development and with the financial authorities in various countries. He has also dealt with some of the problems that this country has to face up to in the very near future. Those are problems affecting our trade and the like. I think that everybody in Australia would wish to see some casing of the restrictions on world trade, Sir. It is desirable that the barriers to a free exchange of goods and services between nations be lowered. The free-trade people have a saying that protectionists can hold a conference only on a battlefield - that trade restrictions and trade barriers lead inevitably to war. It would be a good thing if mankind could get back to a situation in which trade between nations was unrestricted.

The argument for protection, of course, is that new nations must be allowed to establish themselves against the competition of older established countries. Unless protection becomes the fiscal policy of a new nation, the development of that country is not likely to proceed with any great rapidity. In 1821, I think, Friedrick List created a zollverein, or customs union. He brought about the unity of the German states, principalities, kingdoms and republics in one economic union. That was followed, in due course, by the establishment of a political union of Germany under Bismarck. I can see something like that happening on a grander scale in Europe to-day, with the -establishment of the European Economic Community of six nations.

Speaking only for myself, I would wish to encourage the formation of such communities. The European Economic Community will inevitably help to raise the living standards of the 167,000,000 people in that area. It will ease tensions, it will promote unity, and ultimately, it may lead, in the decades .-ahead, to a united states of Europe. I think that is highly desirable. I think that if there were a united states of Europe covering the whole of the territory which we now know as Europe and, maybe, Russia as well, .that particular portion of the world would be ,a much happier place than it has been over the last 160 years, during which, largely because of trade difficulties and other things, the European peoples have been tearing themselves to pieces.

War has followed war. In our time we have seen two terrible wars that have been concerned with the attempt by one section of the European people to dominate, not only the rest of Europe, but the whole of mankind. I do not share the fears of the Minister in regard to the European Economic Community which includes France, West Germany, Belgium, Luxembourg, Holland and Italy. If we do not have that sort of union in Europe then, ultimately, we will have more strife and more trouble.

I see clearly the peculiar position of the United Kingdom in regard to this matter. Great Britain has to decide whether she will be just an island nation off the coast of Europe, or the centre of a very great commonwealth. She wants the advantages that come with the one as well as the advantages that come with the other. Because these six European nations will not concede her the right to exempt certain products should she participate in their scheme, naturally she wants to form some other body. I join with the Treasurer in hoping that, ultimately, ,a way out of this difficulty can be found.

I would not try to discourage, at this particular time, the attempt of the European people to solve their problems. After all, the problems are their own and they have a right to settle them in their own way even if, at times, it seems to toe to our disadvantage. We are a great nation in the making. We have a great territory, but a small number of people. We :are trying to sell our wheat, our wool and our minerals.

The future of wheat is uncertain and the price of wool in this season is variable although it is better than it was last year. Naturally, we want people to buy our products and we, in turn, want to be able to get sufficient from the sale of those products to finance the importation into this country of capital goods and consumer goods so that our economy can be not only maintained, but further expanded.

We are an immigrant receiving country. We have encouraged a lot of people to come here and live amongst us and the overwhelming majority are very happy here. It may be that, in due course, they will attract their relatives and friends to Australia. Whilst that is true in one sense, if the European Economic Community really builds itself into some strength, immigrants will cease to flow from European countries. People will be much more disposed to stay at home. Nobody ever wants to emigrate if he can possibly avoid it. None of us wants to leave Australia to live elsewhere. There is always a wrench when people have to leave their native land, their relatives and friends, and go to live elsewhere.

We are faced with a lot of very great problems and very often what is one man's meat is another man's poison. If we could regulate the affairs of the world to our advantage others might suffer. Some people are trying to regulate the affairs of the world to their advantage, and we seem to be in difficulty. 1 do not know what will come out of this International Development Association. The Government is not certain of its policy in regard to this new proposal. The Minister has been rather cagey - if I may use the term - about the attitude of his Government. There are many imponderables associated with the proposal.

Mr Harold Holt - They are being worked on. We will have a much clearer idea shortly, I think, because the articles of association are now being drafted.

Mr CALWELL - I heard the Minister say that, but I do not know to what extent, after they have been drafted, they will be considered by the suggested member nations. The International Bank for Reconstruction and Development, if I recollect what the Minister said - I only got his statement a half an hour before he started - is fathering this scheme and there may be some disadvantages to Australia in it at the moment. Whatever they are, I hope that they will not be very great.

Speaking for myself again, I say that if there is to be access to international funds or funds controlled by some international authority for development, I would rather see those funds used by the really underdeveloped nations of the world. The Treasurer made some facile reference to Australia being midway between the developed countries and the underdeveloped countries. In one sense, that is true enough. But we are not an underdeveloped country if we think of the conditions that exist in quite a lot of other nations throughout the world to-day.

Those of us who were privileged to attend the Commonwealth Parliamentary Association Conference here last week heard very eloquent and touching pleas from the representatives of new nations inside the British Commonwealth for more assistance in order that they may raise the living standards of their people. They asked for more assistance for education, more assistance for the modernization of their industry, and more assistance for the mechanization of agriculture. If it is possible for us to stand out of the field of international borrowing so that these people can secure a greater advantage I think it would be all for the best from the point of view of world peace. When I think of the privileged peoples and the underprivileged peoples I think of the distinction between those who are reasonably affluent and those who are suffering from chronic destitution, misery, and even starvation.

Mr Harold Holt - But in practice the process works the other way. If sound borrowers can become established on the international bond markets, that encourages further lending. The absence of countries like Australia does not mean that more money will go to those countries. It helps to defeat the creation or development of an international bond market.

Mr CALWELL - I am sorry to hear that argument put forward. Whatever we can spare for development in the free world to-day should be used to raise living standards.

Mr Harold Holt - We are helping to do that.

Mr CALWELL - By contributing to the Colombo Plan.

Mr Harold Holt - And by example.

Mr CALWELL - We have no reason to be ashamed of what we are doing. We are contributing £3,000,000 a year to the Colombo Plan. We are spending large sums of money on the development of Papua and New Guinea. We are discharging our responsibilities, but in May last year Professor Copland said that instead of contributing £3,000,000 a year to the Colombo Plan, Australia should be contributing £25,000,000 a year.

Mr Harold Holt - The honorable member is missing the whole point of my argument. My argument is that a soundly developing country like Australia encourages overseas investment and by that example the process can be induced to go on into other countries. If people have an unsatisfactory investment and lending experience they are discouraged from expanding into other countries.

Mr CALWELL - I hold an opposite view as to the necessity for Australia to go on to overseas markets. We could attract much more Australian investment if the right honorable gentleman's government would secure an alteration of the Constitution so that this Parliament could determine interest rates other than bank interest rates. If we could do that we would be able to prevent a number of people offering exorbitant interest rates to lenders in Australia. Those interest rates have the effect of diverting into private channels money that should be used for national development. I think that the public sector of the economy in Australia is being neglected and the private sector is being over-supplied for the erection of luxury hotels and luxury homes and the manufacture of luxury goods. That should be avoided. Therein I disagree with the right honorable gentleman.

I was amazed to hear him say that having more or less milked the cows dry in America and Britain, he is now looking to German pastures to see what he can do about getting some money there. If the logic of that position is sound, I presume that in due course we will be trying to borrow roubles on the Russian market or yen on the Chinese market. We have been carrying the hat around in Switzerland for a few years. The Treasurer should look at the report of the Joint Parliamentary Committee on the Constitution and see whether the time is ripe to put the particular proposals that are recommended by eleven out of twelve members of that committee to the people so that the Constitution, which has been in operation for 57 years, may be altered. With the exception of one Liberal Party member, all members of the committee believed that this Parliament should be clothed with additional powers so that the economy may be regulated in the best interests of Australia. In this Parliament we can exercise powers over banking, exports and imports. We can exercise other fiscal and financial powers, particularly the taxation power, to make sure that the economy is expanded and that everybody in the community is treated fairly, but as a Commonwealth we lack certain other powers. If we had all those additional powers, perhaps we would not need to go abroad seeking new loans to the extent that the Treasurer has done.

It is true that our overseas indebtedness per head of population is less than it was in the 1920's, but the experience of the 1920's is still fresh in the minds of many people. There was a lot of borrowing by the State governments and by the Commonwealth Government and ultimately an alteration of the Constitution had to be obtained in order to prevent States competing with the Commonwealth for available loan funds on world markets. It was a good thing that that happened, but the boom was followed eventually by a collapse. Nobody can guarantee, with inflation proceeding throughout the world to-day as it is and as it has been doing for the last decade, that sooner or later there will not be a collapse of world markets. I cannot see how the economists, with their inadequate knowledge of events even at this stage of our development, are able to build stabilizers that will prevent the economy collapsing if fear grips people. Fear is the emotion that moves the masses; love moves the few. But once people fear that something is wrong, no matter how academically correct an argument may seem, it will not prevent their panicking. I believe it is possible even now to have a panic on Wall-street or even in London.

When I look at the claims of the Russians as to what they have done in recent years I say to myself that if only one-quarter of what they claim is correct, we of the West will be in very grave danger within a decade or two because of the peaceful competition which they will give us for the markets of the world. We will have been outpriced everywhere. I believe that Russian production records should be closely studied by all Western economists. I think we are inclined to be very smug, complacent and self-satisfied about events, and that is not a desirable attitude for any of us to adopt.

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