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Tuesday, 9 May 1961


Mr REYNOLDS (Barton) .- I think that the Australian public has been treated to a series of most unconvincing statements to-night by Government supporters. The honorable member for Moreton (Mr. Killen), with his histrionics, his debating style, and his use of eloquent language and synthetic enthusiasm, would probably be amongst the least convincing of all. Let me refer to a few examples of the specious logic of the honorable member for Moreton. Early in his speech, he referred to the Scullin Government. But that

Labour Government was in office for only about two years, sandwiched in between fourteen years of anti-Labour government which preceded it and approximately eight years of anti-Labour government which followed it. It was a government which was only half in power. It was faced by a hostile Senate which rejected its policy. It was forced to implement, not its own policy but the policy of an Upper House of the same political kidney as this Government. That is the kind of gross misrepresentation that has been paraded here to-night. The Scullin Government wanted to borrow a meagre £18,000,000 for public works in order to put thousands of unemployed back to work. It was denied the right to do that because of the anti-Labour party that was in power in the Upper House of the Parliament.

The honorable member for Moreton also misrepresented the Labour Party's ratification of the Bretton Woods Agreement in 1947. When the Labour Party ratified that agreement it did not envisage that a government, because of its stupid mistakes, would have to borrow overseas. The Labour Government did borrow from the International Monetary Fund in 1949. Everybody will remember the reason why. It was not due to the general position of our overseas balances. It was due to the dollar shortage which confronted this country at that time.


Mr Duthie - It affected the whole of the sterling area.


Mr REYNOLDS - Yes. It was for that reason that Mr. Chifley went to the International Monetary Fund, not because of the general position of our balance of payments. We all remember how the Chifley Government built up the overseas reserves of this country. In 1949 Mr. Chifley borrowed, not £78,000,000, but a mere £9,000,000, for the very reasons that I have outlined. The honorable member for Moreton (Mr. Killen) did not go on to say that in 1952 when the Menzies Government squandered our overseas balances and put people out of employment and put businesses on the run, it had a similar experience to that which it is having to-day. It had to borrow 30,000,000 dollars on that occasion. The honorable member also did not mention that in 1956 the rules of the International Monetary Fund were changed and somewhat tightened and that the terms which Australia is obliged to accept to-day are harsher and more restrictive of our economic sovereignty than they were before. That is why the Labour Party to-day warns the Australian people that this Government has got down to the bottom of the barrel and is looking to the lower echelons of its resources. The Australian people and the business people of this community are justifiably apprehensive about what will happen in the future.

I am reminded of another fatuous theory by the Minister for Labour and National Service (Mr. McMahon). He asked, " What do we want these overseas funds for? We do not want to stack up funds overseas just to have them there ". Of course we do not, but as a country engaged in international trade and very dependent on our primary industries for earning capacity, we know very well what could happen to this country if the next two years were years of drought or flood which decreased our ability to export. We know what a position this country would be in. We have had an unprecedentedly good run of seasons, but the time could run out. Let us hope it does not, but what would be the position of our comparatively slender reserves, when we are actually dipping into the second line of reserves and are asking for an additional standby loan of £45,000,000? We are entitled to ask the Government why it is drawing on those reserves. Why is it dipping into them? What will be the position if the Government, as it stubbornly asserts it will, takes no action to prevent this country from wasting its overseas reserves on goods that we do not need? What would be the position should we run into periods of climatic calamity, fire or flood or any of the various calamities which have overtaken this country on previous occasions? Suppose that prices continue to fall - what will be the position then? The honorable member for Moreton, like the rest of the Government's supporters, lives in a world of make believe. The simple, down-to-earth facts of life are that prices are not what they were. That is the world we have to live in and that is the kind of money which we have to raise in the international market. We have the money from the prices we are receiving to-day and not from the prices we would like to be receiving; and there is a world of difference between those two situations.

The Government is stubbornly and arrogantly sticking to its point that it will go on bringing into this country many goods that we do not need. Reading the newspapers only the other day, I noticed that luxury motor boats are being imported from Hong Kong. They are produced by American interests in Hong Kong and are being introduced into this country. In any mercery shop one finds not locally produced ties but Italian and American produced. The shops are cluttered up with overseas imports such as cameras, transistor radios and all the rest of these things. They are all very nice, but it is very important that this country should be able to pay for them and that the purchase of these imports should not mean that some unfortunate Australian family will be thrown out of work, or that some businessman who has built up his business and has helped to build up this country should be forced to close down. I have in my electorate, like every honorable member, men who, with prudence, diligence and foresight have re-invested most of the profits they were making in recent years and have tried to build up their industry. Some of them have been exporting.

A sporting goods manufacturer in my electorate comes to mind. His business is not the biggest, but it is a sizeable one. He has been building up his investment and reinvesting his profit, depriving himself of the right to consume his profit. He reinvested and expanded his industry, which was exporting goods from this country and then suddenly, within a couple of months, his turnover was halved. His unit cost of production must go up. Everybody knows that large-scale production is more economic than small-scale production. Here is a man whose cost of production has now gone up. but he still pays the same rates on his property and many of the same fixed overhead costs, even though he is able to produce only half as much as he produced before. Another firm came to my notice the other day. It was given credit by the bank when it was trying to build up its production and its capital assets. It was no sooner operating than along came these cruel credit restrictions which have paralysed that business and made it impossible for it to get a bank overdraft with which to carry on. That is the utter frustration that people in the community are feeling to-day. And we wonder why they are so upset and unhappy about this Government's sudden changes in policy.

The Government made a colossal mistake in February, 1960, and it is not prepared to sacrifice its political face in order to retrieve the position which is to-day increasing the stream of unemployment in the community and the number of businesses that are going broke. It is not prepared to establish financial and economic confidence in the community. It would rather save its political face - and I do not believe it is even doing that - by stubbornly sticking to its policy of allowing imports to come into this country rather than take measures which would save the jobs of thousands of Australians who are now being put out of work and save many businesses that are being sent on the rocks. Many small businessmen, unable to get the share capital that big businesses can get, are being forced to sell out to big business to-day. The small businessman is the one who goes on the rocks more quickly. It might be a small builder, for instance. There are lots of them in every community. In my social engagements I meet many of these men who have gone out of business, men who have had to sell out and become the employee of some larger enterprise in the community. That is the unfortunate position that exists in the community to-day.

I want to refer now to some of the things which have occurred in the community as the result of the Government's policy of refusal to abandon free imports and to abandon the present credit restriction policy which is supposed to counteract the freedom of imports. The Government allows imports to come in without restriction but, at the same time, a financial restriction on the Australian economy in order to cut down the people's freedom to import all the goods that the 1960 measures permitted. That is the utter stupidity of the whole position, and as a result, there has been the depression of business which I have just described. One can parade figures and statistics. It is a precise and laudable exercise, but people are more impressed by their own observations in the community in which they move. For my part, I have met in recent weeks, unfortunately, a number of businessmen who have been, put into the financial plight I have described. In my office in the electorate of Barton,, which is situated in the same building as the Commonwealth Employment Office which services the whole of the Illawarra region, I have seen a stream of unemployed people in the last few weeks. The same people come back week after week trying to get a job. Some of these people even have to demean themselves and ask for a loan of 10s. so that they can buy something to take home. The most that any family can get by way of social services, if the bread-winner is unemployed, is. £6 2s. 6d. a week. That is the maximum amount, no matter whether there is one child or ten children in the family. The most that can be obtained by way of unemployment benefit is £6 2s. 6d. a week, and provision is made for another £2 to be received by way of income before the unemployment benefit is reduced.

These are the desperate straits in which people find, themselves. It is all very well tocite statistics about the matter, but there is nothing like the feel of the human problem that one gets by being in the community and seeing what is happening. Thisis not a sob story, and I do not want it tobe taken as such. I want the Government to be realistic and to realize what so many people in the financial circles of this country have realized for a long time, that we cannot afford to allow imports to pour intoAustralia without restriction. The difficulty will not be overcome by the severe financial restrictions which this Government has imposed on the economy, and which, according to statements of Government spokesmen themselves, will be retained until 1962 at least. My bet is that the Government will stubbornly stick to this policy until it has got the election over, hoping that it can get back to office. Then, if it is returned, import restrictions will come on. That is my bet. In an election year the Government feels that it cannot be honest with the Australian people and revoke its stated policy.

There is depression in all kinds of business circles. People have invested their funds and are now seeing the value of them whittled away simply because the unrestricted floods of imports are crowding out locally produced goods. The unfortunate fact is that, although the Government told us that these imports would be allowed to come here so that local prices would be reduced, that has simply not happened. The consumer price index for the twelve months ended December, I960, showed an increase of 4.5 per cent, over the figure for 1959, while the 1959 figure was only 2 per cent, higher than that for the previous year. In the last financial year we had these imports flowing into the country for almost the full year, but instead of prices going down, they went up. The consumer price index shows that that is what happened. The increase was almost double the increase that had occurred in the previous year.

In the face of all these facts, the Government, as at least one other speaker mentioned, is trying to maintain a wage-freeze policy. Ask the public servants their view about this. The vast majority of them have no opportunity of getting the benefits of overtime that are available to people in other walks of life. They are in a pretty desperate position. It is no wonder that they have come out and issued a strong challenge to the Government to do something about the position in which they now find themselves, and have threatened that if the Government does not do so it will have a block vote registered against it, by way of protest, at the election.

Of course the Government did not have the courage to do this year what it did last year, when it went to the Conciliation and Arbitration Commission and actively tried to prevent a wage increase, and did so with signal success. This year there would have been more justification, according to the Government's lights, in taking the same action to prevent inflation. But it did not do so. It merely supplied information to the commission, or so it said. This is the kind of political dishonesty of which I accuse the Government.

The import boom is continuing at the expense of local industry. Local industry is being affected most. Credit restrictions are not preventing the flow of imports, which has hardly gone down. What has gone down is local production. Our local manufacturers are the ones who are taking the knock. Overseas goods have continued to be imported at a steady rate, while local industry has suffered. Yet the Government registers surprise and indignation when the

Chambers of Manufactures tell it what they think of its policy. Of course the Government is working on behalf of the big commercial interests, while our local industries are suffering. It is not only the employee who is being affected; the local businessman is also being hit.

The Government now says that it will siphon a little money into the building industry. The number of houses and flats being constructed has decreased by 30 per cent., and the Government says, " There is no need to worry; next month we will release an extra few millions ". In the meantime, of course, people have gone out of business, contracts have been lost, and the business community generally has suffered disclocation. The person who has had his business ruined receives no comfort from the statement that the position will improve next month. In any case, the problem is not capable of solution by the little readjustments that the Government makes every now and again. The quarterly review of the Australia and New Zealand Bank Limited for April, 1961, had this to say -

General credit restrictions have proved relatively ineffective in forcing a rapid check to imports. . . .

The Government's policy has checked the upward surge in the economy. The danger now is that there will be a swing too far the other way. . . .

Having achieved their immediate objective, the government would be wise to recognize the existence of a balance of payments crisis, and introduce suitable measures to curb imports without further delay.

I ask honorable members to note particularly the last paragraph.

That is a journal of the Australia and New Zealand Bank, not of the Labour Party or of any kind of radical organization. It is a statement made by a financial institution the views of which are normally completely in line with those of the Government.

The simple fact is that since June last our overseas reserves have gone down by £127,000,000. Retail sales have been tapering off. I have not time to give all the figures in this regard. In March, 1960, re:ail sales were 8.4 per cent, higher than they were twelve months earlier. At the end of the last year they were higher than at the same period twelve months earlier, but not by 8.4 per cent.; they were only 5.6 per cent, greater. The rate of increase had gone down by almost half. I have already mentioned that 30 per cent, fewer houses and flats are now being constructed. Of 34 branches of industrial production listed by the Commonwealth Bureau of Census and Statistics in March this year, nineteen showed declines over the last twelve months, as against fifteen that showed increases. Some of the industries showing declines were those concerned with gas, bricks, hardboard, floor coverings, domestic refrigerators, washing machines, radio sets, television sets, cotton yarn and woollen yarn. I have not time to mention them all.

The number of house approvals granted in the March quarter was 17,818, as against 25,813 in the March quarter last year. This showed a reduction of 30 per cent. I would like to have time to quote the remarks of the Victorian Liberal Minister for Housing, Mr. Petty, concerning people who live in ivory towers and quote statistics about how we are catching up with the housing lag. I would also like to quote in detail the remarks of Mr. Cox, a spokesman for the building industry in New South Wales, last Monday week, when he said that for builders connected with home building in New South Wales the position is worse than it was in depression days. That is strong language. Yet the Government wonders why there is this agitation in the community and why so many people are worrying about the position. These gentlemen I have mentioned are not politically biased against the Government. These condemnations . have been uttered by people who are not normally sympathetic to the Labour Party.

The great tragedy of the situation is that not only is our consumption going down, not only have we got unemployment, and not only are businesses going out of existence; but our national development, which the previous speaker had the temerity to refer to, is being severely prejudiced by the Government's measures. I would like to touch on various aspects of national development, but I shall confine myself at the moment to a few remarks on one important aspect of it. I refer to education. In recent months we have found that the President of the United States of America has made 2,700,000,000 dollars available as federal aid for primary, secondary and technical education in that country. At the same time, the Australian Government rejects the almost universal demand of the Australian people that it should do something to lift up Australia's educational system, so that it may be more in line with the needs of our economy and may be more capable of assisting in overcoming the difficulties that we are facing.

To-day I heard somebody talking about the inroads of automation and mechanization and asking how we could keep up with this scientific development. Whatever anybody may think about primary and secondary education, everybody must be able to appreciate how closely vocational education and technical education are connected with the economy of the country. The President of the United States of America, unlike this Government which washes its hands of any responsibility for these things despite its knowledge that the States are unable adequately to perform the task, had this to say -

To that end, I am requesting the Secretary of Health, Education and Welfare to convene an Advisory body drawn from the educational profession, labor industry and agriculture as well as the lay public, together with representation from the departments of Agriculture and Labor, to be charged with the responsibility of reviewing and evaluating the current national vocational education acts, and making recommendations for improving and redirecting the program.

In other words, the Federal Government of the United States, like other governments, is now recognizing that education is absolutely fundamental not only to the social and cultural development of the community - that is vastly important - but also to the economic development of the community. This young country, a continent with 10,000,000 people, with all its opportunities for development and expansion, is being retarded, and the great promise of Australia-unlimited is being denied by the Government's refusal to be realistic and its rejection of requests that have been made to it by so many members of the community. There are other responsibilities, of course, in respect of roads, hospitals, water conservation and so on, that have been referred to.

This afternoon the Treasurer talked about what this Government has done in the past eleven years, more or less inviting us to forget about the present situation and to remember only the good things that the Government has done in that period. But some of its achievements in the past eleven years are not very creditable - the inflation that has overcome the country, the deterioration of the people's savings that has occurred and the improper balance of payments that has forced the Government at this belated stage to act in the way that it has done. There is also the fact that no genuine plan of national development has existed during the time of this Government.

We have had the spectacle of Country Party members moving and supporting in this House a motion seeking decentralization. No outright condemnation of this Government's policy over the last eleven years could have been more dramatic than that motion by the Country party in this House lamenting the absence of a proper policy of decentralization. It dealt with all the deficiencies of the policies of this Government. I do not know whether honorable members understood what they were doing, but they were parading for the Australian people, in a comprehensive motion on decentralization, a request for the Government to do something after almost twelve years in office.

I ask the Government to act in the name of humanity. Let it forget about saving political face. It will earn more respect from the people if it acknowledges that it made a colossal mistake twelve months ago when it decided to allow unrestricted imports into this country - imports that are causing severe hardship to Australian industry and misery to thousands of homes and families, as well as putting many worthwhile people out of business.







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