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Wednesday, 8 March 1961

Mr HOWSON (Fawkner) .- I often follow the honorable member for Blaxland in debates in this chamber, and in following him to-night I am glad to be able to make the observation that he is apparently for once putting his faith in the " Sydney Morning Herald ". I welcome his trust in that newspaper but, for my part, I would much rather put my faith in the Government's statement on its measures, and I am absolutely certain that the coming months will show that the Government's confidence is more justified than the prophecies of doom made by the honorable member for Blaxland. It is a pity that he has not spoken more effectively and to the point on this extremely important subject that was introduced into the House by the Acting Prime Minister (Mr. McEwen). I welcome the fact that our Acting Prime Minister has highlighted, at the start of this new session of Parliament, the importance of our overseas trade. Everything that he has said tonight affects each one of us. We must congratulate him on bringing forward a new series of measures, aimed at engendering greater confidence in the way in which our exports can be promoted and the way in which the Government will help private enterprise to do this during the coming months. Every one of the measures that the right honorable gentleman foreshadowed this evening is a measure for which we have been waiting for a long time. We are glad now that the whole programme has been put before us so convincingly. Let us consider some of the important measures that were outlined to us.

First of all, those who seek new overseas markets will be able to claim increased taxation concessions in respect of expenditure so incurred. I think that we should congratulate those pioneers of to-day who are prepared to go out into new markets, seeking ways of increasing our exports. They will be greatly assisted by the doubling of the taxation allowance. This could be the most important of all the measures outlined to-night.

The second measure - the concession in respect of pay-roll tax - is one that manufacturing industries and the Export Development Council have stated to be one of the most important ways in which exports can be increased and a keenness for this job can be engendered in industry. Therefore I feel certain that this concession too will play a large part in the development of new markets overseas, particularly for the products of secondary industry. In spite of what the honorable member for Blaxland has said about the need for productivity, with which we would all agree, there are many facets of Australian industry in which the processes of automation have already been introduced. We know that our steel industry and all the industries that use steel can compete on overseas markets. Therefore, we are in a position, if we offer these new inducements, to take advantage of many markets which are already waiting to be developed by private enterprise operating from Australia.

We have heard about the way in which trade commissioners are to be sent to areas in which we have played very little part in the past. The exploration of market possibilities in South America, the Middle East and the Persion Gulf have been mentioned to-night. Those are three important markets which have hardly been touched, so far, by Australian industry. To my mind, the Persian Gulf area is one of the most important of all because it is the area with which we probably have the greatest deficiency in our balance of payments. In view of the amount of oil that we buy from the Persian Gulf it is important that we should endeavour to export to that area a quantity goods similar to that which we import from it. New markets would en able us to take advantage of the tremendous overseas credits that these countries are now accumulating. The fact that we are grasping the opportunities with both hands is something for which the Government must again be commended.

I also welcomed the announcement that we would be prepared, if necessary, to subsidize new shipping services. It is impossible to develop new markets overseas unless there are regular shipping services to these areas. I am certain that we would have done a great deal in the past to develop markets in South America had there been a regular shipping service. Now that this has been recognized, shipping services will be encouraged and the trade. I am certain, will follow the ships.

The news that the Government recognizes the need to spend money on our ports, particularly those concerned with the export of coal, is long overdue. There is no doubt that we could increase our exports of coal to Japan and other countries, including South America, if we could improve the loading equipment and the harbour facilities in the port of Newcastle. This is one of the great announcements that we have heard to-night.

Another important announcement by the Acting Prime Minister was that the Government will co-operate with private enterprise in -the encouragement of the erection of warehouses and facilities in a number of our overseas markets. When I was travelling in Africa last year with the Commonwealth Parliamentary Association I found a number of markets in which there was a great possibility for the sale of Australian goods, but one of the great deficiencies was the shortage of warehouse space. There was also the difficulty of breaking into a market when we did not have Australian goods in the shop windows.

Mr Chaney - Are there not balanceofpayments problems in African countries?

Mr HOWSON - Not so much in West Africa and Nigeria and Ghana. With the high price of cocoa, their exports are fairly high and they are anxious to buy goods from Australia. The provision of warehouse facilities not only in Africa, but also in Canada and many other of our present markets, will, in the long term, prove to be one of the most important measures mentioned by the Acting Prime Minister.

It is with those few words that I welcome the speech of our Acting Prime Minister to-night. I feel that it needs to be given all the emphasis that we can command in order to encourage the people who will benefit from these proposals to get behind the Government and renew their efforts to export Australian goods in the coming year. The Acting Prime Minister's statement reinforces the views that we have all held for some time that exports, particularly to new markets such as South America, the Persian Gulf and Africa, are absolutely vital to the improvement of our economy. I will refer later to some of the problems in our traditional markets. Our search for new markets, possibly to offset difficulties in the traditional markets, is tremendously important.

As the Acting Prime Minister has said, much has already been done to encourage our exports. Much will be done as the result of what has been said to-night. But there is still much to do and I hope that, as the months go by, and these measures start to take effect, we shall again hear of new measures and new ideas whereby we can keep ourselves in the forefront of exporters. I think that already the work of the trade promotion section of the Department of Trade shows that Australia is on the ball with fresh ideas for selling Australian goods overseas. If it keeps coming up with new ideas, on the lines of those that have been brought forward to-night, we shall continue to keep Australia's name amongst those of the foremost trading nations of the world.

I turn now to the other side of the picture. Having looked at the problems associated with expanding our exports, I think there is another aspect of the balance of payments difficulty which must be considered; that is to say, we must ensure that our imports are kept within reasonable bounds. All those who heard or read the Speech delivered yestereday by the Administrator must have been pleased to learn that the Government has shown once again that it is determined not to inflict on the nation again the inequities associated with the whole system of import licensing. The problems that existed during the eight years in which we endured the import licensing system are well known, and I am certain that the Government is right in doing every- thing it can to see that we shall not again suffer under that system. Its ill-effects, as I say, are well known to all of us. In addition to the problems associated with it which we have to face at home, there are international obligations into which we have entered, and which make it extremely undesirable for us ever to revert to that system.

I must say, however, that there were one or two silver linings to the dark cloud of import licensing. One of the advantages of the system was that it was possible for us to forecast fairly accurately the volume of our imports for many months ahead. We knew exactly where we were going from month to month. Now that the system of import licensing is no longer in operation, we cannot forecast what lies ahead with the same accuracy as we could previously. Having this in mind, I was rather interested to learn that the new Government of New Zealand which took office a few months ago - a government of the same political persuasion as the Australian Government - has indicated that it will introduce a system of forward exchange notification for the more accurate assessment of overseas funds prospects.

To my mind, our overseas reserves are important to every citizen of Australia. We are all affected when a particular person in the community places an order overseas for goods to be imported into Australia. I think, therefore, that it is highly desirable that a similar system to that which is to come into operation shortly in New Zealand should be introduced here. Any person intending to place an order overseas for goods to be imported into Australia would then have to register his intention, giving the date on which his commitments were likely to be incurred. We should then have a knowledge of the commitments that the nation as a whole would have to meet from month to month. If it were found later that the delivery date of the goods was likely to be significantly altered, that fact would also have to be registered.

As honorable members may know, I spent many years in a retail store. As a buyer for that store I always believed that while the stocks on hand, and the sales being made, were important, by far the most important of the indicators available in the business was a knowledge of our forward commitments - what goods we had on order and what payments we would have to make for them after a certain time. When I look at the position of the nation it appears to me that similar considerations arise. 1 believe that as a nation it is most important for us to have an accurate foreknowledge of the bills that we will have to meet in the months ahead.

Mr Uren - You have Buckley's chance of knowing that, the way you are going.

Mr HOWSON - That is not entirely correct. We already have a valuable system in operation, and with very little extra effort we can obtain a great deal of valuable information.

In the few minutes that are still available I should like to speak of another matter. While we have rightly directed our attention to-night to the development of new markets, it is important also that we should not forget our traditional markets, particularly those in the United Kingdom and in Europe. I make no bones, therefore, about returning to a subject on which I have already spoken in this House. I refer to the importance to Australia of changes that are taking place at the present time in the European Common Market. Tremendous changes have occurred, even since the House met three or four months ago. There have been changes in tariffs, many in an upward direction, and there has been a movement towards economic self-sufficiency for the six countries in the European Common Market. There has also been a growth in the Euro.pean Free Trade Area, or the Seven, as it is more popularly called. The important point is that there have been increasing signs that

i.   rift is approaching in the European scene between the Six and the Seven. From Australia's point of view this will certainly not be good economically, and - and this is more important - it will not be good politically. Th° division of Western Europe into two camps will certainly affect Australia adversely.

To an extent I believe the United Kingdom has been held back from joining the European Common Market by the effect that such an action might have on other countries of the Commonwealth. If this is so - and there has been some evidence that it is - I think Australia should again emphasize that any rift in Europe is something from which we shall all suffer and something that should be remedied at the earliest possible opportunity. I believe that it is in the interests of everybody that the United Kingdom should join the European Common Market and that "e should encourage everybody who can do so to try to move the United Kingdom towards that end. If it does so, there will be short-term economic problems for Australia as a result, and in due course, and if the rift is healed, we must ensure that these short.term economic problems will be overcome. But 'et us first make certain that the steps are taken in the proper order. First, we should look at the world problem of saving Europe from being divided into two camps. Having solved that problem, we should then consider all possible ways in which Australia's interests can be safeguarded.

Other problems will arise, and in this connexion I refer to a short article, by a Mr. Neal, which appeared in the journal "Foreign Affairs", of January, 1961, at page 249. The passage read -

It is in the economic interest of the United States and of all third countries -

That includes Australia - to bring the E.E.C. and EFTA together in a way which will minimize the degree of discrimination. (The political value of heating the split is obvious.) This requires the calculation of a nice balance between allowing sufficient discrimination to carry out the original purpose of the association and being so discriminatory as to split the industrialized nations of the world and their associated overseas countries into separate trading blocs. I have suggested, pending more complete knowledge of the average external tariffs in all of the areas affected, that an all-round reduction of the average tariff on industrial products to about 10 per cent, might strike this balance so 'far as the industrial countries are concerned.

To achieve an average tariff level on industrial products of not in excess of 10 per cent, would require cuts in the external tariff of the Common Market, of Britain and of the United States of probably between one-third and one-half.

These are the big problems that still lie ahead. The fact is that tariffs overseas are rising, and this will affect Australia's trade. The further this goes and the more selfsufficient Europe tends to become, the more Australia may expect trade discrimination against it. Already other trade groups are being foreshadowed. In addition to those in Europe, there are groups in

Latin America, Central America, Africa, South-east Asia and the Arab League. Therefore, these discriminatory practices are likely to increase and we must watch to see that whilst we are developing our new markets we are not neglecting the problems that are likely to arise in our traditional markets, on which we have depended for so long.

If I may, I will sum up what I have tried to say to-night. The Acting Prime Minister has already demonstrated to us the importance of the trade problem. The measures announced by him herald a renewed effort on this very important problem. The Government has shown a determination not to be beaten by this difficult problem of the balance of payments, and it will not resort to import licensing. Instead, it is adopting a positive policy and giving an aggressive lead to the nation, telling us to get out and to export and so pay for the imports that we need. This, I think, is what we expect of a great trading nation and we congratulate the Government on giving us this lead. The problems in Europe to which I have referred are yet another facet of this same task. Though the dangers are growing, I am confident that the Government will ensure that Australia's interests will again be safeguarded1. With that in mind, let us ensure that the whole of the nation at this time gives the Government every support in the task that it has undertaken on our behalf.

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