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Thursday, 16 March 1961


Mr BEATON (Bendigo) .- I rise in this debate on behalf of the electors of Bendigo, because they, like all other Australians, have a big stake in the struggle for economic security that looms ahead. This debate, after four days, is nearing its end. Member after member has added his contribution, until a nation-wide picture becomes clear. It is a picture of rising unemployment, of dislocation of industry, and of confusion and loss of confidence, evidenced by the bewildered query from businessman and worker alike, "What will happen next? "

A dispassionate review of the situation discloses that shattering blows have been dealt to the timber, building, textile, paper and motor vehicle industries, and to allied industries that are struggling to maintain their levels of employment. The Victorian Minister for Housing - a member of a Liberal government, mind you - a month ago gave this Government facts and figures relating to the smashing blow dealt by the credit squeeze to the building industry in his State. In Victoria at that time, he said, production in the brick industry had been reduced by 50 per cent., and in fibrous plaster factories by 25 per cent. He said that timber mills were in a desperate plight, while all over the State dealers in builders' hardware, plumbers and the like, were encountering a disastrous drop in trade. All this is happening in a State in which the waiting list for Housing Commission homes is around the 18,000 mark. The pattern throughout the Commonwealth was similar. The position worsens as time passes!

My colleagues on this side of the House have drawn attention to the plight of numerous industries, and several honorable members on the Government side have had the courage to follow suit. Even the leader of the Country Party in the Victorian House of Assembly was moved to state that the credit squeeze was, to the primary producer, worse than a flood, a fire or a drought.

For the underlying causes of this unfortunate situation we must look back first to February, 1960, when, without any real notion of how our export income was to compensate, the Government opened the floodgates and allowed a torrent of imported goods to flow into this country.

Then, in November, with imports running at a tremendous level, came the credit squeeze, together with other restrictive measures. The Government had found that our overseas reserves were dwindling fast, with no prospect of improvement - a state of affairs forecast, I might say, by honorable members on this side many months ago. In addition, the Government considered that some industries were too prosperous and that their labour requirements needed dampening down. So the economic restrictions had a twofold purpose. A glance at the growing total of unemployed bears witness to the success of the measures against what the Government termed the too-prosperous industries.

But the Government's measures, designed to dampen down the demand for labour, came at a time when a downward trend in the labour market was already apparent. A Department of Trade survey completed recently indicates that the shortage of skilled tradesmen was no longer a threat to production in key industries, while a recent Australia and New Zealand Bank index showed that the general slow-down had occurred before and independently of the Government's November credit restrictions. So we can say that a bludgeoning blow was dealt at the time when a gentle touch would have achieved the same purpose.

In his speech on this motion, the Acting Prime Minister (Mr. McEwen) said that he did not believe in controls, that he desired the maximum business freedom. After eight years of import controls, those words must have caused the businessmen, struggling to salvage their business undertakings from the Government's credit control, some ironical laughter indeed. We have been repeatedly told in ministerial statements that the dislocation of industry is, in effect, only a redistribution or redeployment of labour. Such a statement gives little consolation to the unemployed and the tens of thousands to whom the Government's measures have brought only the spectre of possible unemployment.

The Government likes to parade its socalled abhorrence of controls. I ask: What is the credit squeeze but a control? What is the re-deployment of labour other than sheer economic conscription? What was the proposal to force life assurance companies and superannuation funds to contribute to Government loans - about which the Government possibly had second thoughts - but a control? In the crisis of wartime, man-power controls were accepted, but in times of peace it takes a Liberal-Country Party Government to destroy so-called uneconomic or, at the other extreme, flourishishing industries in order to conscript labour to other fields of employment.

One of the major targets of this socalled re-deployment of labour is the Australian textile industry. One of the tragedies of the rapid decline in recent months of this industry is the fact that so many country communities depend upon textile factories for their livelihood. Courageous enough to challenge their city competitors, who have so many economic factors in their favour, many firms have set themselves up in the country, trained their staffs from scratch and become essential to the economic life of their respective country towns. These were truly decentralized industries. But what now? Completely disclocated they are forced to retrench many of their skilled staff and keep the remainder on a part-time basis. The flooding of cheap imported textiles into this country was serious enough, but then the Government decreed that the overdrafts of these manufacturers must be drastically reduced, not by 10 per cent, or 20 per cent, but by 90 per cent. Any one who knows the textile industry must realize that in many cases the summer and autumn period is the period of peak production, the period of production designed for winter sales, the period when carry-on credit is essential for the provision of raw materials, the payment of labour and the payment of many other costs of production. Without this carry-on credit our local industries are not given even a fair chance to compete with the imported goods. So that, doubly hobbled, our textile industries are not in the race and, inevitably, men and women are denied their just right to work and maintain their families.

To ascertain the true employment picture in country towns and provincial cities, a realization of the situation in normal times is essential. Ministers have said on several occasions that Australia's economy is balanced on a razor's edge. Because of the over-emphasis on expansion in the capital cities, the economy of country towns and cities is always balanced on a razor's edge. In normal times, employment is never plentiful. In normal times, our country youngsters join in the drift to the cities to get jobs, not because they want to, but because of sheer economic necessity. Any recession, mild or otherwise, is felt immediately in country communities, where opportunities for alternative employment are limited indeed.

The situation in the City of Bendigo is typical of that of any provincial city. More than 100 persons have lost their employment in recent weeks, whilst a greater number of others work only four days a week. In several weeks' time, the summer seasonal employment will end. This will mean the addition of from 200 to 300 to the list of jobless persons. At Wangaratta, the major part of the town's work-force - nearly 700 textile workers - are forced to accept part-time employment, whilst other country towns face the worst winter for many years. To their great credit, the majority of country employers, whether manufacturers or shopkeepers, have retained their staffs despite the serious drop in trade. Many have sustained losses for weeks on end in the hope that relief will come, and I earnestly suggest to the Government that sufficient carry-on credit be made available to country industries so that the otherwise inevitable drift to the cities will not once again make a mockery of the term " decentralization ".

Our balance of payments problem is noi new. In reality, as a nation, we have lived on money borrowed or invested from overseas for many years, and the Government, knowing this situation, deserves strong criticism for having taken all this time to formulate a drive for additional exports, it is now making a belated effort when the wolf is at the door. It is generally accepted that, in addition to the flood of imports, the other factor influencing our imbalance of payments has been the fall in overseas prices for our basic export commodities. The question then arises: Are we doing all we can to promote higher prices for our vital primary exports? Our major commodity, of course, is wool, and in this sphere we must surely be looked on with amazement by the other trading countries of the world. We market an essential commodity - wool - under an open auction system with no reserve price! In other words, we sell our most important export item without asking a price. Surely that is something unique in world trade. Surely, for the sake of our national solvency, and for the sake of the small wool-growers, who are squeezed between the lowering wool prices on the one hand and high costs of production on the other, such a situation cannot be allowed to continue. I repeat what 1 said during the Budget debate last August: The institution of a reserve floor price scheme for wool marketing is inevitable.

Any businessman knows that to increase demand is to assist in increasing prices. Wool promotion has been a subject of interest and of lively discussion for some time. We are aware of the tremendous bid for world markets that has been made - with success - by manufacturers of synthetic fibre interests. We cannot expect any lessening of their activities, and unquestionably, while we cannot match the colossal sums that they spend, we must endeavour to increase our expenditure on wool promotion but with this qualification: I agree with many wool-growers who say, " No reserve price; no increase in the wool levy ". To me, any increase in promotional expenditure without a change in the auction system would be folly indeed. When that change comes, as I am sure it will, the wool-growers would be unwise to refuse to help themselves. Of course, in helping themselves they would be helping the nation. As a positive gesture, I suggest that when they do decide to increase their contributions to the promotional fund the Commonwealth Government should make a contribution in proportion to the additional amounts that the growers contract to pay.

In view of the announced incentives for the promotion of our export trade, an investigation into the freight rates that are charged by shipping lines which carry our products overseas seems to be overdue. Our exports depend entirely upon overseas shipping companies, and their high freight rates are a great deterrent to the further development of Australian export markets. For instance, British exporters with diverse cargo classifications are, in many instances, charged lower freight rates than those which Australian exporters have to pay for only one-half the hauling distance. Japanese exporters, too, pay rates that are far less than Austraiian exporters have to pay for equivalent distances.

The overseas shipping companies claim that rates from Australia are high because of the comparatively low density of traffic offering from here. Surely that is an argument which has very little foundation. Like the pies or rings which operate against the wool-grower, the shipping lines get together to defraud our exporters of both primary and secondary products. About eight or nine shipping lines operate to Asian ports where the Government holds hopes for new markets. Only one-half are conference lines, as we call them, yet all offer the same general cargo rate of 249s. per cubic ton to Singapore. There is no competition, and the action of these companies is nothing more nor less than a gang-up on Australian producers and exporters. The wide-awake exporter who seeks a cheaper rate by tramp steamer is gently reminded by the conference lines that he may have to use their vessels one day and it would be unfortunate if space were not available for his urgent cargo.

If the Government genuinely desires to explore every avenue for increased export earnings, it should smash the shipping monopoly on our all-important export trade. Nearly 4,000,00 tons of shipping lie idle in the world's ports - an ideal situation for the establishment of competition, whether by private enterprise or by the Australian National Line. The time is ripe for action.

Unquestionably the Government is gambling that its economic squeeze will eventually reduce the cost of imports to a manageable level. If we examine the respective costs of various items on our import bill we find that one stands out - the tremendous cost to this nation of its continually rising imports of crude oil and petroleum products. In the financial year 1959-60 our import bril for crude oil reached the staggering figure of over £100,000,000. The import of crude oil and its products is increasing in volume at the rate of more than 6 per cent, per annum, and it should be plain to all that in both the economic and the defence spheres, the fact that we have not discovered our own supplies of oil will continue to react against our self-sufficiency and our safety. lt is plainly evident that far from there being increased activity in the search for oil - as is greatly desired - there is a lessening of activity by the major oil companies. A few years ago three seismic parties were operating in Western Australia where now there is only one. At Port Campbell near Warmamboo! in witera Victoria a sensational gas discovery fourteen or fifteen months ago lifted hopes, but since then only one hole has been drilled. In Papua the major partners in the oil search have announced their withdrawal. Why? Have they lost hope of success? I doubt it! Rather, I suggest that the surplus stocks of crude oil in the hands of the major companies overseas, and their inability to dispose of those stocks, are adequate reasons for their present luke-warm approach to oil exploration in Australia. Naturally, a new source of supply would embarrass them further.

The discovery of oil in economic quantities would not only wipe off a substantial part of our import bill, but also would lead to additional export earnings from petroleum products. We earned £17,700,000 in 1959-60 in this way, and that figure could be increased considerably. The very thought of oil and our precarious supply position in time of war must give our defence chiefs nightmares. In the economic sphere the discovery of oil would certainly assist in lowering the cost structure. It is said that the cost of transport in Australia is 33i per cent, of all costs, and Australian oil, especially if discovered on the eastern seaboard, would surely lower the cost of transport. With so much at stake, we can well ask what is being done. After consideration, the answer must be, " Not nearly enough ".

Briefly, we can summarize our efforts to date in this way: About £80,000,000 has been spent in Australia and its Territories in the search for oil, but, in the light of its tremendous importance, the Commonwealth Government's contributions can be regarded as insufficient. Both the French Petroleum Institute and our own Bureau of Mineral Resources admit that little geological and geophysical information is available. In effect, many of the bores to date have been stabs in the dark and if oil is discovered next week or next month it will be colossal good fortune. One would think that a government that was ready to gamble on its relaxation of import restrictions would make a far greater investment in a field in which success could go a long way towards solving our balance-of-payments problem. Only this week the Government announced subsidies to companies engaged in the search for oil. This is certainly encouraging, but again it is far short of a dynamic approach to the problem. There is much to be done. The French drilled more than 2,000 wells in the Sahara before striking oil in commerical quantities. In Alberta, in Canada, it took more than 3,000 wells to reach the pay-off. Our total is less than 500.

The Commonwealth Government should set the pace and not be merely what amounts to an interested bystander. A statutory corporation, or a commission similar to the Snowy Mountains Authority should be set up to play a major part in the search for oil. If that suggestion proves to be too much for the free-enterprise purists, then the very least that is needed is an additional annual investment of from £5,000,000 to £10,000,000 in partnership with the companies engaged in oil exploration. I believe the oil subsidy should be paid only on a footage-drilled basis and only on wells sited on locations determined by geophysical survey to hold the possibility of oil in economic and commercial quantities. With all the aids of modern science at our disposal wild-cat wells should be strongly discouraged, whilst subsidies on a footage-drilled basis are the nearest thing we can get to a programme of payment by results. This country, in the interests of its economy and its defence, needs its own oil supply. I have no doubt that our vast continent harbours oil, and the Government must provide the shot in the arm which the exploration programme needs so badly.

To summarize, our national balanceofpayments problem needs broadly two approaches. In the short term, selective import controls appear unavoidable, whilst in the long term a reserve floor price scheme for wool marketing, allied with an increased promotion drive, an attack on shipping freight rates and a dynamic oil search programme, all combined with the Government's export incentive plan, could help to provide a basis for economic security in the years to come. Only time will prove whether the Government's taxation incentive plan alone will provide sufficient inducement for industries to strive for additional overseas trade. But time is not on our side, and I say again that the reimposition of import controls, however undesirable, will be inevitable.

This Government has been a drifting government, relying not on economic planning but on the good fortune of good season after good season; and now, with the economic tide turning, it has become a gambling government. Its failure to combat the evils of inflation and its failure to foresee and plan for the rainy days ahead deserve the censure not only of this Parliament but also of the Australian people.







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