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Wednesday, 8 March 1961

Mr DAVIES (Braddon) .- I should like to offer my congratulations to both the honorable member for Higinbotham (Mr. Chipp) and the honorable member for Calare (Mr. England), the mover and seconder of the Address-in-Reply, on their very excellent speeches.

I should like also to say how much 1 regret that illness has caused the honorable member for Gippsland (Mr. Bowden) to resign from the office of Chairman of Committees. I, for one, had occasion once to be very appreciative of the tolerance that he extended to honorable members when he was in the chair. I also wish to congratulate you, Mr. Deputy Speaker (Mr. Lucock), on your election as Chairman of Committees. I feel sure that we will be given by you the same tolerance to which we were accustomed from the honorable member for Gippsland.

I also express the deep grief of all Tasmanians over the passing of the late GovernorGeneral, Viscount Dunrossil. I know that they all mourn the late GovernorGeneral's untimely passing.

I shall take the opportunity of this debate on the Address-in-Reply to raise in this House matters of great importance to the nation as a whole and in particular to the island' of Tasmania, and to my electorate. I refer to the very grim and serious position in which the Australian timber industry finds itself as a result of the present credit squeeze and of the heavy imports of timber from Eastern countries.

The timber industry of Australia is not only a very great industry, but is of major importance to this country. It is interesting to note that this industry's output is worth £125,000,000 a year to Australia. Almost all the materials used in the sawmills, amounting to a value of some £69,750,000 annually, are provided from Australian sources. The industry is very highly decentralized, and it is most important as an employer of labour and as a means of opening up the outback of Australia. The forests themselves comprise a very great national asset, and with a fall in the demand for timber they will waste, and will also be subject to great fire danger if they are not opened up and used to their economic capacity.

The timber industry is a great primary industry and, when functioning as it should, provides a whole cycle of employment from the fallers and loggers in the bush, the mill hands, transport workers, waterside workers, employees of the shipping companies, and the plumbers, electricians and other workmen associated with home building, right down to the makers of home furniture. All these people have been affected by the pre sent credit squeeze - man-made and imposed by this Government. For credit restrictions, whether they be selective or comprehensive, must affect home-building activity throughout Australia. Wherever credit restrictions hit they cause a reduction of trading activities. They undermine confidence and planned progress, with a resultant measure of unemployment. Like a stone thrown into a pool, they cause ripples which spread until they cover the entire surface.

Sudden dismissals in any industry have a stultifying effect on all employment. This, in turn, affects all economic activity, with home-building first on the list. Recent inquiries have borne out this fact. In Melbourne alone - and Melbourne is the traditional market for Tasmanian timber - the number of building permits issued dropped from 792 in January, 1960, to 388 in January, 1961 - a decrease of 51 per cent. As if that were not bad enough, there are hundreds of uncompleted houses in Melbourne because people are unable to find the money to finance their completion. A survey taken recently showed that these uncompleted homes are being attacked by vandals. That is an indication of the state of affairs in Melbourne. Of course, the Government will say that the credit squeeze was never intended to affect home builders. I quote now a statement by Dr. Coombs, Governor of the Reserve Bank, which was published in the Launceston " Examiner " of 26th November, 1960. He sard, according to the " Examiner " -

The banks had accordingly been asked to be especially restrictive in new loans . . . where it appeared that advances might be used to finance . . . building construction where social purposes such as housing were not involved.

But we know that the credit squeeze has been imposed on housing. Mr. T. R. Brabin, who is the manager of the Tasmanian Timber Association, advised the Treasurer (Mr. Harold Holt) of this fact in a letter dated 27th January, 1961. He pointed out, among other things that - fa) Hire purchase company money for construction of new homes has virtually dried up.

(b)   All except one insurance company has ceased making money available for new homes and this one has doubled the insurance cover required.

(c)   All housing societies have considerably restricted activities and one at least has reduced by £750 its maximum loan.

(d)   Money for homes through banks is virtually unavailable.

Mr. Brabinwent on to say

The result of these restrictions is the almost complete cessation of commencements of new homes by at least three of the largest building companies ... in Melbourne and varying degrees of cuts in all others. All this despite the statement of Dr. Coombs.

He went on to advise the Treasurer as follows: -

You will appreciate that the building industries in Melbourne and Tasmania use the bulk of Tasmanian timber produced and any major drop in demand will seriously affect our industry.

Currently, houses under construction are maintaining a moderate demand for our timber but this is progressively and rapidly falling away.

This letter from the Tasmanian Timber Association written in January goes on as follows: -

I anticipate that within 4-6 weeks we could have a serious depression in our industry - accentuated by the abnormally high competitive imports already here and due to arrive in fulfilment of orders placed prior to December.

Whilst appreciating that it is your Government's stated intention of " nipping the top off the boom ", the deeper the economic trough into which we are rapidly sliding, the longer will be the climb back to normalcy.

The letter continues -

On current indications, we could be in trouble for 12-18 months or longer, unless effective remedial action is taken fairly soon.

Coupled with the credit squeeze we have the trouble caused by imports of cheap timber from the East. Together, those two factors have caused a slump, recession, depression, or call it what you like, in the timber industry. They have certainly hit the timber industry in Tasmania worse than anything that it has previously experienced. In my maiden speech in this House I warned the Government of the danger of these imports of timber and since then I have spoken several times about the danger. In the last question that I put on notice I joined the honorable member for Leichhardt (Mr. Fulton) in making representations to the Minister for Trade on this matter, but all to no avail. What is the position to-day? I shall quote just a few cases so that they can be put on record in this House. If we use October, 1959, as a base for statistical purposes we find that in January, 1961, holding yards in Melbourne were holding 560 per cent, more Oregon imported from America than they held in the base month of October, 1959. That is to say, they held five or six times as much of this imported material as before. As though to add insult to injury, we find that imported Oregon is being used in the new Reserve Bank building in Launceston. In Tasmania, the timber work of almost all buildings of this nature is of Tasmanian oak. which is stronger, more durable and cheaper than the imported timber. It is from one-quarter to one-half the price of

Oregon. It shows how stupid the Government is when, on the one hand, it talks about the need to reduce imports whilst, on the other it uses imported Oregon in the construction of the Reserve Bank in Tasmania's second largest metropolis.

Now I turn to private imports. I have here a letter from the Australian Plywood Board concerning this. Honorable members can imagine how that body is concerned. Several plywood mills in Queensland have closed and in my own electorate there has been heavy retrenchment in employment at Somerset. This country is importing plywood, although Australia can supply all the plywood that can be used in this coun try. In its letter, from its head office in Brisbane, the Australian Plywood Board said -

The Australian plywood industry has taken care of the demand for that product in this country for many years past, and has expanded as Australia has developed.

At the present time capacity exists and the industry is capable of supplying the whole of Australia's needs for plywood and allied products without the need for importations from foreign countries. Figures for imports of plywood during the six months ended December, 1960, are shown below, these having taken place since the removal of import restrictions by the Federal Government.

The list which is given of imports from various countries shows that 6,020,000 square feet of plywood was imported from Japan. The total imports of plywood shown are 20,000,000 square feet. Yet we in Australia can supply all the plywood that we need for our own use. From a total of 200,000 square feet a month, the imports of plywood have increased to the fantastic figure of 800,000 square feet a month, a rise of 400 per cent, since import controls were lifted.

My friend and colleague the honorable member for Leichhardt (Mr. Fulton), with whom I have been associated in representations on this matter on numerous occasions, has advised me that the firm Far Northern

Plywoods, in his area, has dismissed 280 personnel and will close down completely if the position is not improved by protective tariffs. This firm uses native timbers. Timber-cutters, hauliers and others will add to the number of unemployed caused by seasonal conditions in Queensland. My colleague advises me that protests from local authorities including chambers of commerce and trade unions have been forwarded to the Government urging the introduction of selective import controls. Similar protests and demands for corrective action have been made from every other area in Australia.

I now turn to sawn timber. The wholesale lifting of restrictions has resulted in the importation of 52,500,000 super, feet of timber from Malaya and Borneo alone during the last six months, compared with an importation of 52,000,000 super, feet for the whole of 1958-59. In other words, we imported a little more in the last six months than we did for the whole twelve months of 1 958-59. As a representative of the people, I am concerned at the effect of credit restrictions and imports on my constituents, but apparently that is of no concern whatever to this Government. In my electorate alone, 97 men were dismissed last Friday night. Some bush mills have closed down. The position is very grim.

Some of our mills cannot sell a stick of timber on the Sydney or Melbourne markets. An agent for wholesale yards in Melbourne told me on Friday that the yards have almost reached saturation point. He was holding 1 ,500 per cent, more Tasmanian timber than he usually holds. He said that he had to hold it. Even if customers wanted to buy it, they could not do so because they could not get the necessary money. Another agent who normally holds 50,000 lineal feet of flooring to-day holds 750,000 lineal feet and a further 250,000 lineal feet is on the water, on its way to him. We cannot sell. We have not a market left to sell to.

To-day, the Tasmanian Timber Association has telephoned us to say that Tasmanian newspapers have head-lined the news that 300 more employees will be dismissed in my electorate alone on Friday because of the Government's credit restrictions and its failure to re-introduce import controls. I am sorry that this has happened. I have no desire to use the names of mills because the millowners have been doing a wonderful job and I have no desire to bring undue publicity to them. But I want to point out to Parliament the effects of this recession or depression or whatever you like to call it. On Friday, one big mill in my electorate which employs 150 people will commence to employ them on the basis of one week on and one week off. Another will keep fifteen key-men employed on a five-day week. It is afraid that if it loses them they will never come back to the industry. But it will put 70 other employees on to a three-day or four-day working week.

From another mill in the electorate of Bass seven men will be dismissed on Friday. The orders of that mill have been reduced by 50 per cent. From another, ten or twelve men will be retrenched next Friday. Three more bush mills will close in this locality. From another mill twelve men are to be dismissed and the rest will be employed on a three-day working week. Another mill has been operating on a four-day working week for the past two weeks. In another, men in the stacking yard are being retrenched. At a mill in Launceston, between 40 and 50 men are to be dismissed and others will go onto a three-day and four-day working week. Another mill has had a 20 per cent, cut in production. Normally, it takes men on at this time of the year, but it is giving consideration to a further 20 per cent. cut. From another mill, 82 men will be dismissed' on Friday night.

Is it any wonder that we in Tasmania, who have been hit particularly hard by the Government's action, are very concerned? Mills throughout Australia have been hit in the same way. Some of these mills are family businesses. I know of one that has been a family concern for 60 years. The whole life of the community has been built up around it. It employs twenty married men. It is not a case of just hiring and firing men as we find in other industries in big cities. Timber milling is dangerous. There is built up between the employer and the employee a bond of friendship and comradeship, born of danger in the bush. So it is very difficult for the employer, on Monday morning, to say, "You, Joe, are to take a week's notice".

Mr Griffiths - Government supporters do not believe it.

Mr DAVIES - Possibly they do not believe it, but I do. I have lived with these people. Last Thursday and Friday were the worst two days I have experienced, not excepting those of the last depression or the difficult war and post-war days. I went from mill to mill, from one group of persons in the bush to another, to places where mills were about to close down. I saw a company representative come through the bush in a four-wheel drive vehicle and hand out dismissal notices. I have never experienced anything so depressing - such a feeling of hopelessness and despair. Thank goodness that we were able to place at least 28 men in other positions, but I went home late on Friday night feeling terribly sad and upset for those who could not get another job.

It hurts me to think that many of these men are ex-servicemen. Many of them fought on the Kokoda trail, at Milne Bay and in the Coral Sea battle. They fought and beat the Japanese and to-day the Japanese are beating them. It hurts me to see this unemployment caused by people whom we once fought gallantly and defeated. To-day, they are beating us because of the 400 per cent, rise in the quantity of imported plywood. Of course, these men in the bush cannot understand it. They cannot understand why the Government of a country for which they fought and risked their lives now fails to look after them.

Why does not the Government introduce selective import controls? We need imported timbers - that is admitted - but we do not need to have the door wide open all the time. The only solution to our economic problems lies in this Government calling off the credit squeeze and introducing selective import controls. If it were to take this step to-morrow, or even tonight, recovery would take a long time, because there are large stocks held in every capital city and every major holding centre. Every warehouse and holding yard for timber is chock-a-block, and it will take a long time for us to recover after controls are re-introduced, because we will have to use up all these stocks.

There is another reason why recovery will be a slow process. There has been -a decline in the economic confidence of the business community, and it will take a long time for that confidence to be restored. I have spoken about the timber industry, but other sections of the community have been hit by the credit squeeze. Small shopkeepers, and many people in the rural sections of the community, including farmers, have been severely affected. Young people who have been trying to build up businesses, thus assisting in the development of the country, have been visited by bank managers who have told them that they must reduce their overdrafts. I know of a man in the midlands of Tasmania - not in my own electorate, thank goodness - who was sold up the other day because he could not repay a £700 overdraft. That is the kind of thing that will open up the way for big monopolies to come in and take over. In the timber industry, for instance, small mill-owners will be forced to close. The big operators will take over the family mills which have done a tremendous amount of good for community life in the remote districts of Tasmania. Honorable members in this House have frequently spoken of the desirability of decentralization, and I suggest that these bush mills represent one of the best examples we can find of the benefits of decentralization.

Making a survey of the overall position in Tasmania, we find that at the woollen mills of Patons and Baldwins (Australia) Limited in Launceston 100 employees are to be sacked on Friday night, and 1,200 are to go on to a shorter working week. These decisions have been taken only to-day. The employees of the Austral Bronze Company Proprietary Limited m Hobart have been on a shorter working week for some time. The Ford Motor Company of Australia Proprietary Limited made an announcement only to-day which shows how the credit squeeze is having a snowballing effect, not only in the timber industry but also in every other kind of industry throughout the country. The company has announced that 980 more employees will be dismissed next Friday - 500 in Melbourne, 350 in Geelong, 100 in Brisbane and 30 in Adelaide. This will bring the total number of dismissals in the motor industry to 5.712.

I have no desire to get up in this House and talk about unemployment. It upsets me to do so. I have never made - and I hope I never will make - political capital out of the misfortunes of my fellow men, but I have been deeply grieved by the recession that has developed in my country, the effects of which have started to snowball. I speak from my heart for the people I represent. I am immensely sorry for those who have been thrown out of work, and I sincerely hope and pray that the Government will give heed to the representations I make, and to those that will be made by members of the Tasmanian Timber Association, who will be coming to Canberra during this week. We hope that the Government will ease credit restrictions, first on advances for home building. We hope, also, that it will introduce selective import controls on imported timbers. We may then be able to turn the corner, so that confidence may be restored throughout our economy, and particularly in the timber industry, with which I am intimately associated.

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