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Tuesday, 14 March 1961

Mr FOX (Henty) .- When the Leader of the Opposition (Mr. Calwell) moved his motion expressing want of confidence in the Government, I believe that he was really trying to point the bone. He was trying to wish onto the Australian people a malady from which he would like to see them suffer because he believes that there lies his only hope of political salvation. However, the Leader of the Opposition has been crying calamity for so long that no one takes him seriously any longer, least of all the Australian voters. Any one who listened to the Acting Prime Minister (Mr. McEwen) last Thursday has no doubt whatever that the Government is in full command of the situation. The worker and the businessman, who have enjoyed eleven years of unparalleled prosperity under the Menzies Government, are being asked to believe that a government which has brought about the greatest period of prosperity in Australia's history has suddenly taken leave of its senses.

Any thinking person who listened to the Acting Prime Minister realizes that in adopting its present economic policy, the Government was perfectly well aware that these measures were not calculated to win votes. Any person who realizes this must know also that there is a perfectly good reason for these measures of restraint that have been adopted. As a matter of fact, the Prime Minister (Mr. Menzies) stated only last month in a speech -

We see no reason to alter the substance of our policy which we knew would, in the short run, be unpopular with many people, but which we believe is in the best interests of the nation.

The Government has been accused of trying to ruin the prosperity we are enjoying and trying deliberately to create unemployment. If we stop to think about these accusations, we realize just how incredibly stupid they are. No one likes to see a tree which has been bearing good fruit heavily pruned. The ignorant person believes the orchardist is ruining the tree, but, in truth, in the near future the tree becomes stronger than ever and better able to withstand disease and produce more and better fruit than it did before. No one likes taking medicine, but we all know that when a physician prescribes medicine he does so for our own good. During the next few weeks people all over Australia will be receiving injections to help them ward off Asian 'flu, just as others have received injections of Salk vaccine to help them withstand poliomyelitis, and others have been vaccinated against smallpox. These vaccines give persons small doses of the diseases they are designed to combat, and this is the exact effect of the measures which the Government has taken. But when the first effects of the injections have worn off, the Australian people and the economy generally will be stronger than ever before, and better able to withstand the effects of a severe drop in prices received for our exports - and this is a factor over which we have no control.

Mr Courtnay - Tell us about the imports.

Mr FOX - I will come to the imports shortly. It is a fact that the terms of trade have moved against Australia to a greater extent than any other country. These are not idle words. They are substantiated by an index prepared from international financial statistics, which give the terms of trade between 1950 and 1960. They show that of seventeen nations, which are the only ones for which figures are available for the complete period, the terms of trade have moved against only three, and in favour of fourteen. Figures are given for other nations over a shorter period, and in every case the terms of trade have moved in favour of those nations, while they have moved against Australia much more severely than they have against any other country. For instance, Australia's terms of trade in relation to the year 1950 are down 56 points, while for New Zealand they are down twenty points and for Latin America 24 points. For all of the other nations the figures are well up, and for Germany they are up as much as 31 points.

The Acting Prime Minister said last Thursday that if we were to receive this year the same prices for our exports as we received in 1953 - which was not a boom year but which was a base year, recognized throughout the financial world as a year of normal prices - our exports this year would be worth £1,350,000,000, instead of the £880,000,000 which we expect to receive. As I said before, the drop in prices is a factor over which the Government has no control.

It is a strange fact that when everything in the garden is lovely, and when prosperity is obviously booming, the Opposition says that such a state of affairs has come about in spite of the Government, but when our export prices on world markets fall, the Opposition says that the Government should get the blame.

As to the proposition that the Government wishes to create a pool of unemployment, as the Opposition would have the people believe, this is laughable. I will say that by far the most important consideration in the question whether the Menzies Government will be returned to power at the next election will be the level of employment or unemployment at election time. Businessmen will have overcome the hardships of the credit squeeze; the public will have forgotten that for about twelve weeks sales tax on motor cars was increased by 10 per cent. But for every man who wants work and cannot find it the Government could lose one or two votes. The Government is conscious of this fact, and, apart altogether from its desire to see every one share in Australia's prosperity, it has a vested interest in full employment. The Opposition has a vested interest in unemployment, because its hopes of regaining the treasury bench depend on there being a high level of unemployment just before the next election.

The Government can congratulate itself on the very low level of unemployment that has obtained in Australia over the whole period of its term of office. At the same time, I realize that statistics cannot fill empty stomachs, and for every man out of employment the position is very serious.

Contrary to what has been said by the Opposition, the objectives of the Government remain constant. These objectives have been recently stated by both the Acting Prime Minister and the Treasurer (Mr. Harold Holt), but they are worth emphasizing again. They are, first, the maintenance of national development; secondly, a planned immigration programme, with an intake of about 125,000 persons annually; thirdly, a continuing high level of employment; fourthly, improvements, where practicable, in the extent and scope of our social services; fifthly, an adequate level of home building and home ownership and, sixthly, stability of costs and prices. Changing conditions necessarily cause temporary changes in the policy required to bring about all of these objectives, but the objectives themselves remain unchanged.

When we examine the truly magnificent record of the present Government we can see that these objectives have been achieved over eleven prosperous years in a manner unsurpassed anywhere else in the world. We have maintained a steady programme of national development, in the field of water conservation, in the field of electricity generation, and in the field of the development of our natural resources, such as minerals. We have successfully absorbed more than 100,000 immigrants each year, whom we have found employment and housed. We have a record of employment over more than eleven years of office of which we can be proud.

I obtained to-day certain figures from the Bureau of Census and Statistics. Honorable members opposite have cited United Nations statistics, and these figures have also been taken from a United Nations publication. Unfortunately it is not possible to make fully up-to-date comparisons, because although we have figures for Australia announced in February by the Department of Labour and Nation Service, the latest figures available from the United Nations are for November in the cases of Canada and the United States, and for September in the cases of Japan, the United Kingdom and West Germany. The proportion of unemployment in Australia, compared with our total work force, at the end of January was 1 .7 per cent. If we go back to November, in order to make a comparison with

Canada and the United States, the proportion for Australia was then only 1.1 per cent. Some honorable members may draw false conclusions from the increase that has occurred. Undoubtedly there has been a rise in unemployment, but we must remember that such a rise always occurs early in the year, because there are great numbers of young people leaving school and seeking employment at that time.

Mr Cash - And there are seasonal workers.

Mr FOX - There is the factor of seasonal work, as the honorable member for Stirling reminds me. In November, as I have said, the proportion of unemployment in Australia was 1.1 per cent. In Canada it was 6 per cent., and in the United States it was 5.7 per cent. My friend, the honorable member for Perth (Mr. Chaney), now tells me that the proportion is now 7 per cent, in the United States. As his statements are usually accurate, I see no reason to doubt this. If we go back to September, which is the latest month for which figures are available for Japan, the United Kingdom and West Germany, we find that the figure for Australia was a little more than half that for the United Kingdom, it was equivalent to that for Japan, and only West Germany had a lower level of unemployment.

We have improved the amount and the scope of our social services at a rate unprecedented in Australia's history. We have, I believe, the highest rate of home ownership in the world. About 75 per cent, of all the married couples in Australia either own or are buying their own homes. We have a level of home building in Australia of which we can be proud. Whereas in 1939 there was one home for about every 4.5 persons, to-day there is a home for approximately every 3.7 persons. Only last year we built more than 90,000 homes, which is the highest number ever built in a year in our history.

As to costs and prices, the honorable member for Hughes (Mr. L. R. Johnson) on Thursday, 9th March, quoted figures which had been published by the United Nations to show the trend of prices between 1953, which had been accepted as the base year, and to-day. He stated -

I was interested, a short time ago, to look at the monthly bulletin of statistics provided by the statistical office of the United Nations. It is very interesting to see how Australia compares with other countries with respect to inflation.

He proceeded to quote many figures based on a unit of 100 for 1953, and he said -

Since 1953, we find that the index of wholesale prices has risen to 105 in Canada and to 106 in the Federal Republic of West Germany . . for the United Kingdom 103 and for the United States of America 109. To demonstrate that Australia does not shatter records only in the Olympic Games, the figure for Australia went to 116.

Those figures are correct, but the honorable member conveniently forgot to mention that the figure in France went to 134. The honorable member, like most politicians, quoted only those figures which he believed supported his case. I have heard it said that a politician clings to statistics as a drunk clings to a lamp post - not for illumination but for support. What he did not mention was the way in which wage levels have moved in those countries in the same period.

I want to refer again to the figures which 1 have obtained from the Bureau of Census and Statistics and which, in turn, have been taken from a United Nations publication. These figures relate not to primary production but to male units in the manufacturing industry and are based on male wages. They indicate wage levels in the August quarter of 1960 as compared with the levels in 1950, and they cover the ten-year period. Wages in Canada have increased by 63 per cent, and in the United States by 53 per cent. In Japan they rose by 106 per cent, and in West Germany, the only country to top Australia, by 110 per cent. In Australia wages rose by 106 per cent., and in the United Kingdom by 94 per cent. Those figures are interesting when compared with the rise in prices. Whereas, as was mentioned by the honorable member for Hughes, in Canada prices rose to 105 on the index, wages increased by 63 per cent. In Australia prices rose to 116 on the index and wages increased by 106 per cent.

Mr Chaney - Where did you obtain these figures?

Mr FOX - From the Bureau of Census and Statistics, and I was informed that they are taken from a United Nations publication. In the United States prices rose to 109 on the index and wages increased by 53 per cent. Compare those figures with Australia's figures of 116 and 106 per cent, respectively! In the United Kingdom prices rose to 103 on the index and wages by 94 per cent. If you take the figures in their entirety they give a completely different picture from that which was painted by the honorable member for Hughes.

The Government has been criticized severely for abandoning import licensin g. It is strange to recall that the Government was criticized also when it imposed import licensing. Both of these criticisms were made because of the way in which the controls affected the pockets of the critics. There were several reasons why import controls were dropped. Two of them were, first, because they were inequitable and, secondly, because they were open to abuse. One heard many stories of exploitation, some being told in this Parliament. I also heard many outside this place, but the trouble was that people who told me about other persons with import licences who were charging 15 and 20 per cent, for the use of licences would not come forward and supply the facts which would enable the Government to take remedial action. One man told me about this, and when I asked him the name of the company concerned, he said, " You cannot expect me to put myself in like that. I heard it at so-and-so." That was always the case. One could not obtain the facts. I have no doubt that many firms were exploited by companies or individuals who had licences. That in itself was a very good reason for ending import licensing, and I hope that the Government never finds it necessary to re-impose it.

Apart from that, the Government felt that the additional flow of goods into the country would sharpen competition and reduce prices. We all know that when goods are in short supply those who have money get what they want. I recall just after the war, even before this Government came into office, some one ask:d me whether T knew how he could obtain a State Electricity Commission sticker for a hot-water service. He stated that he was prepared to pay £25 for it. I replied, " That is black-marketing, and as long as people like you are prepared to pay money to get the sticker the price for that article always will be higher than it should be ". He replied, "So what? I have the £25 and I want the sticker. Anyway, I did not start it ". That was typical of the attitude of people. The Government felt that by abandoning import licensing the flood of goods on the market would bring about more genuine competition. In any case, as the Acting Prime Minister pointed out, the proper way to control imports is by customs duties and not by licensing. But whether the lifting of controls has the results that it should have rests largely on the manufacturers themselves. I know that some manufacturers who complained that imports were harming their products imported, in those cases where they thought that advantage would accrue to them, the components to manufacture the completed article. They could import the components more cheaply than they could manufacture them here. To me that seems to be a particularly short-sighted policy.

I have a very interesting story to relate. Some two years ago a manufacturer approached me and asked me to make representations to the Minister for Trade with a view to having his import quota increased because he could not get by on his existing quota. Only a few weeks ago, the same manufacturer sent for me and asked me to make representations to the Treasurer to have the credit restrictions eased. I said, " Why do you think the credit squeeze has been brought about? Do you not think that Australia's balance of payments position has had a lot to do with it and that the import controls which you were very happy to see lifted have resulted in a flood of imports? Added to this, unfortunately, the price of our exports has fallen. These are the reasons why the credit squeeze is necessary." But this man's pocket has been affected and he, like other people, feels it there most.

The Acting Prime Minister on Thursdaylast announced measures which have been taken by the Government to overcome the balance of payments position. He announced export incentives including a remission in pay-roll tax and, in certain circumstances, income tax. He referred also to the lifting of the embargo on the export of iron ore. In my opinion, this should help to swell greatly our export income. He referred to the speeding up of the standardization of the rail gauge between Kalgoorlie and Fremantle and between Broken Hill and Port Pirie, and he mentioned the Government's policy in relation to road development in the north.

I believe that this Government which has so successfully governed Australia during the past eleven years and which has been largely responsible for making Australia one of the world's great trading nations and which has an unsurpassed record in employment, housing, immigration and social services, knows exactly what it is doing, and that when the people have the opportunity later this year to give their verdict they will again show their confidence in the Menzies Administration by returning it to office.

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