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Tuesday, 23 November 1965

Dr J F Cairns (YARRA, VICTORIA) .- The statement by the Minister for Trade and Industry (Mr. McEwen) is a comprehensive and interesting one. It indicates a number of lines of development of policy which may materially affect the Australian economy some day. There are a number of points to which I should like to direct the attention of the House so that perhaps something might be said or done in respect of one or two matters that I think are quite urgent. The House will recall that earlier this afternoon the honorable member for Bendigo (Mr. Beaton) asked the Prime Minister (Sir Robert Menzies) whether Australia proposed to take any early action to assist India with supplies of food. The honorable member particularly had in mind, I think, a gift of wheat. The honorable member for Bendigo pointed out that the Indian Prime Minister, Mr. Shastri, had recently stated that despite the shockingly low, almost starvation, standards that prevail in India, it had been necessary for him to call upon the Indian people to reduce even the amount of food that they were eating now. This situation had been brought about by the shortage of food. Our Prime Minister informed the honorable member for Bendigo that he had not yet had time to discuss this matter with the Minister for Trade and Industry and, of course, the Minister's statement is conspicuous for its lack of any reference whatever to the situation.

The Minister told us that he had had long discussions with Mr. Manubhai Shah. I hope that those discussions have improved relations between Australia and India. I think they well may have done so. It was Mr. Manubhai Shah, I think, who recently felt it necessary to emphasise that relations between Australia and India were of a formal nature. The Minister for Trade and Industry told us that his talks had been helpful in further promoting the good relations that already exist between our two countries. Indian Ministers have seen fit recently to imply that those relations are not nearly as good as they might be. I would like to know whether at any stage any Indian Minister or other official with whom the Minister had conversations gave the impression to him that India would be pleased to receive some assistance from Australia in the form of a gift of wheat or other food.

Mr McEwen - The answer to that is " No "

Dr J F Cairns (YARRA, VICTORIA) - I would like to know also whether it is necesary for the Australian Government to receive a formal request from India before it will consider sending a gift of wheat to that country. I am well aware that the Minister for Trade and Industry said that he was able to announce that, in response to a request from the Indian Government, Australia was prepared to make a gift, under the Colombo Plan, of 4 million lb. of wool to be used in the manufacture of textiles which in due course will be sold, providing finance to assist India. But how many tens of thousands of people in India will starve to death before this process is carried to its final conclusion? I wonder how urgent the Minister thinks this matter is, having just returned from India. I am very disappointed that he did not refer to this matter in his statement.

I was pleased to hear the Minister say that in his discussions with Indian Ministers they had laid much stress on their desire to see more joint industrial ventures. I would like to know whether these ventures are to be set up with private capital or whether the Government will enter into some kind of joint venture which might involve the Indian Government. Will these private ventures be a simple arrangement of one private company with another, or is something else envisaged? I note that the Minister accepts the Indian point of view that joint ventures are needed in India, but so far nothing has been done by the Australian Government in respect of joint ventures in Australia involving Australian capital and overseas capital. I suppose the substance of the statement concerns the lack of balance that exists between the relatively underdeveloped or agricultural producing countries and the developed industrial countries, and the necessity for the advanced industrial countries or importers of agricultural products, particularly sugar, to act in this respect. The Minister has told us that this was the key problem involved in the .discussions, both at the sugar conference and otherwise, but what was the reaction of the industrial countries? What did they say? The Minister told us that he had particularly put it to the Japanese that they did not extend to Australia the kind of preferences that Britain extended. But what responses did the Japanese Ministers make to this specific proposition?

The Minister has told us of some of the things that he discussed, but he did not give any indication of the results of those discussions. Are we to expect before long another statement, giving us some indication of what the Japanese and others are prepared to do, or will the Minister leave us completely in the dark as to the results of his mission? He has given us an excellent statement of the problems discussed but has given very little indication that there have been any results or, if there were results, what they were.

One exception to this claim is the Minister's statement that Great Britain is prepared to give a tariff concession of 50 per cent, on preferences to products imported into Britain. This, in a sense, will reduce Australia's competitive situation there. When this preference goes we will be more vulnerable to competing products. The Minister stated that Britain's action will allow us, in due course, to reduce our preferences by 50 per cent, and that if we do this we should be able to gain important markets in Japan and elsewhere. Insofar as this is a statement of the results of the Minister's visit overseas it is about the only statement of results that he has given us. Are our chances of gaining better trade conditions in the future substantially confined to the consequences of this proposed 50 per cent, reduction in preferences by Britain?

The Minister told us that his talks in Japan revealed that the Japanese Ministers fully appreciated the advantage there could be for their country in making satisfactory arrangements for the importation of agricultural products. He pointed out to us that the agricultural sector of the

Japanese economy is still extraordinarily large. I think he said that 27 per cent, of the work force in Japan was engaged in agriculture. Did he find out from the Japanese Ministers their attitude to this condition? Can they foresee conditions which would bring about a reduction of the significance of agriculture in Japan? If they can and if those conditions were to come about, the result could be an increased flow of Australian agricultural products to Japan, because the current significance of the primary producing sector of the Japanese economy is one of the things preventing the export of food stuffs to that country in large quantities.

If there were such a reduction in the - significance of agriculture in Japan, followed by an increase in exports of Australian primary products to Japan, would we, in our turn, have to be prepared to extend tariff concessions for Japanese manufactured products? The Minister told us that the Australian Government has its policy of protection for Australian industry and that any Kennedy Round offer by Australia would not be made at the expense of the development of our own industries. It is clear that although developments of the kind I have postulated may not be made at the cost of a lower level of employment in Australia, we cannot move very far in this or any other direction unless it is at the cost of some industry in Australia.

What has the Minister in mind in relation to this problem? Or has it been looked at at all? It seems to me that the Minister's statement was an excellent one in outlining problems but that it had very little to say about how those problems are to be solved and about the consequences of the solution of them. The Minister told us that while accepting the necessity for the Japanese Government to provide Japan's agricultural producers with stability - whatever that means - he is convinced that Japan could adopt more liberal import policies for agricultural products without disturbing the protection given to its own agricultural producers. He is convinced about this - and it may be quite right - but he did not give us any reason why he is convinced. Is his conviction the result of a survey of Japanese primary industry by his own Department, or is it the result of something else? Having become convinced of this position and having put it clearly to the Japanese Ministers, what was their reaction? Did they agree? What views have the Japanese Ministers about the future of their own primary industries? This is an important question because in many respects it has to do with one of the most significant barriers to the development of Australian trade with Japan.

Finally I come to the subject of sugar about which, perhaps, the Minister was mainly concerned. He told us that events recently had resulted in a sugar price which was quite uneconomic for the majority of sugar producers and that if it were not for the fact that we have a protected market in Australia and in other places our own sugar industry would have to go practically out of existence. He outlined again very clearly the significance of the problems in relation to sugar. He said there is a pressing need to arrive at satisfactory international arrangements that will bring sugar prices to levels remunerative to efficient producers. He is pretty clear here, and I suppose it must be correct, that the future of sugar can hardly depend to a very great extent on what is done in sugar producing countries, even the ones that are less efficient. Not much can be done on their side. This is a problem - and the Minister made it clear that he recognizes it as such - in respect of the importing countries. He said the producers are looking to importing countries to make much firmer commitments in relation to the quantities they will import and the prices at which they are prepared to import them.

What indication did the Minister get of the attitude of the sugar importing countries to this aspect of the matter? He said that he told the Japanese Ministers that Japan and Canada were the only two major sugar importing countries enjoying the benefit of imports at the disastrously low prices of today. Can he say what the reaction of the Japanese Ministers was to this statement? What are the chances, if any, of a favorable Japanese reaction? This question can also be asked of other sugar importing countries.

On behalf of the Opposition I may say at this stage that I am pleased to hear an account of the Minister's activities overseas. I do emphasise however, that it seems to me he has given us a much better statement of the problems he encountered than of possible solutions of them. In particular - and in some senses it is only one aspect of the question - I think his story about India seems to be shockingly deficient without some reference to the extraordinary food shortage that exists in that country today.

Debate (on motion by Mr. Fairhall) adjourned.

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