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Tuesday, 15 March 1966

Mr HUGHES (Parkes) .- In his speech tonight the Leader of the Opposition (Mr. Calwell) devoted a substantial part of his remarks to the Government's policy and the American Government's policy in relation to the critical situation in South East Asia. I propose to discuss that subject matter. I say at the outset that those in this country who have hitherto been disposed to regard the Opposition as - a credible alternative government will have cause for alarm and for grave misgivings, because the Leader of the Opposition tonight - and I say this regretfully, but it has to be said - descended to the bottom of the bucket of political indecency when he characterised, as he did in unqualified terms, the attitude of the West, meaning thereby the attitude of the United States Government and presumably this Government, in relation to South East Asia as being without standards and apparently without scruples.

Mr Peters - The honorable member looks young enough to me to be in Vietnam.

Mr HUGHES -And the honorable member looks old enough to be as inane as he is. It is the declared and considered attitude of the Leader of the Opposition and what is supposedly the alternative government in the Commonwealth that the policy of the West in relation to South East Asia is without standards and without scruples. It is very interesting to make some comparisons at this stage, and the first comparison I should like to make in this context is with what the Leader of the Opposition said as a member of the front bench of the Opposition only a year ago, as recently as 19th February last year. What was said tonight was not what the front bench of the Opposition said 13 months ago, because we all know - and if we have forgotten we should be reminded - that in February last year the Opposition front bench, including presumably the Leader of the Opposition, said that the American statement of its objectives in South Vietnam deserved the sympathetic understanding of this country. I read from the formal statement put out bv the Parliamentary Executive of the Opposition. It was a statement made at the time the Americans explained why it was that they were about to undertake limited bombing of North Vietnam. The statement read as follows -

In its statement to the Security Council on February 7th, reporting the air strikes against military installations in the south of North Vietnam, America insisted thai ils object in South Vietnam, whilst resisting aggression, is to achieve a peaceful settlement maintained by the presence of international peacekeeping machinery and that it would not allow the situation to be changed by terror and violence.

This statement--

These words should be well noted - of American purposes is unexceptionable and the case for the American action of recent day-, as based on the aim of shortening the war and achieving a negotiated settlement, which would establish and maintain the rights of the South Vietnamese people, deserves sympathetic Australian understanding.

That is what the Leader of the Opposition said a year ago. But tonight he has told the House and the nation that the policy of the United States and of this Government in South Vietnam is without standard and apparently without scruple.

What is the explanation for this change? I shall endeavour to show the House what is the explanation for this fundamental change in the attitude of the Opposition. This assumes - of course, this is always a matter of doubt - that the Leader of the Opposition reflects the attitude of a significant section of the Opposition. The explanation for this fundamental change in Opposition policy is that early in March the Leader of the Opposition was told by the left wing dominated Federal Executive of the Australian Labour Party that he had to make a speech characterising American policy as being cynical and saying that the resumption of the bombing of selected or limited targets in North Vietnam was indicative of the hollowness and insincerity, as the Executive would put it, of the American so called peace offensive. In the speech he has made tonight, the Leader of the Opposition has demonstrated the depths of his servitude - his slavery - to the left wing dominated extra-parliamentary Executive of his Party. There is nothing else to explain this change. What has happened in South Vietnam in the last year?

Mr Curtin - You tell us.

Mr HUGHES - I shall. I shall have some pleasure in doing so. because the honorable member is in need of education. In the last year the situation militarily has changed from one in which the war was in clanger of being lost to one in which it is no longer being lost but in which it is fair to expect that the tide will turn towards victory. I challenge anyone on the Opposition side to controvert that statement, despite all the defeatist, demoralising claptrap that we heard tonight from the Leader of the Opposition when he described this war as being unwinnable. The Leader of the Opposition is the personification of despair - of political no-hope. He is the echo of the left wing dominated Federal Executive which people in his Party, like my honorable friend from Grayndler, is ashamed of.

Mr Daly - Ha!

Mr HUGHES - That was a hollow laugh. The honorable member is ashamed of the Executive.

Mr Freeth - He is not game to say so.

Mr HUGHES - It is a pity he is not game to say so. When the Leader of the Opposition goes so far as to say that our policy and that of the Americans in South Vietnam are without standard and without scruple, what he says is in contrast to some words that were uttered as recently as 19th July last by his Labour friend - I assume he is a friend - the Right Honorable Harold Wilson, the Prime Minister of Great Britain. The Prime Minister of Great Britain has never taken the view that American policy in Vietnam is without standard or without scruple as has been suggested to the House tonight by the Leader of the Opposition. 1 wonder whether the Leader of the Opposition has ever read the words I am about to quote. If he has not, it is a pity. They might have been instructive to him. He might have gained more value from them than he has gained from the dictates of his shabby, left wing extra-parliamentary Executive. This is what Mr. Wilson said -

The American position, which we support, is this -

Mark those words, Mr. Deputy Speaker. This is the Labour Prime Minister of the

United Kingdom speaking, not the so called leader of this rag-tag and bob-tail Opposition which is so divided and disunited. Mr. Wilson said -

The American position, which we support, is this - that when conditions have been created in which the people of South Vietnam can determine their own future free from external interference, the United States will be ready and eager to withdraw her forces from South Vietnam.

That has always been the United States attitude. It is a great pity that the Leader of the Opposition did not read Mr. Wilson's words. Mr. Wilson said further -

That is what they have said and we support them.

The Labour Government in England supports the American position. The Leader of the Opposition in Australia - if you can call it an opposition - says that the Americans are without standards and without scruple. These are disgraceful words to come from anyone who claims to represent any significant body of public opinion in Australia. Those words tonight by the Leader of the Opposition demonstrate how unrepresentative of Australian opinion the Opposition is and how an ti- American are some of its members. Some of them, deep in their hearts, are not really anti-American, but they behave as they do because of their deep bias and because the Federal Executive of the Australian Labour Party cracks the whip over them.

Mr Killen - Are those the witless people?

Mr HUGHES - I am referring to the people characterised by the Deputy Leader of the Opposition (Mr. Whitlam) as the witless 12. After hearing the Leader of the Opposition tonight I submit that we now have the politically witless 13.

Mr Curtin - Now the honorable member is getting nasty.

Mr HUGHES - The honorable member for Kingsford-Smith may think so. I enjoy being nasty in this context. I intend to be nasty because nasty things must sometimes be said.

I turn now to the dreary and pessimistic statement by the Leader of the Opposition that the war in South Vietnam is unwinable. I say unequivocally that the events of the last 12 months have served to demonstrate the contrary. Nobody looking at the position fairly could say otherwise or do other than agree with what I have just put. But I do not have to rely on statements by leaders of the Government which I support in this House. We can go to independent eye witness accounts for a view of how the war in South Vietnam is progressing. I propose to read what a gentleman named Michael Wall has said about the war. He has been in South Vietnam since early in January. He writes for the "Manchester Guardian " - a journal which has never been noted, as far as I am aware, for its right wing tendencies. If anything, its tendencies are slightly in the other direction. Nevertheless, it is a very reputable and reliable journal. Writing in the " Manchester Guardian" of 10th March 1966 Michael Wall stated -

If Ho Chi Minh and General Giap believe the Americans can be defeated in the field as the French were, they are disastrously mistaken. American military morale is high and will remain so, for no soldier serves more than 12 months in the theatre. American potential strength is overwhelmingly superior and will prevail even if the present policy of not escalating the war continues and the bombing of the North is kept to its present ineffective level. Vietcong methods are beginning to alienate the countryside, and there is a fair chance that with American backing the efforts at a social revolution in South Vietnam may make a mark.

It is a pity that the Leader of the Opposition did not search a little further in his quest for source material. It is a pity that he simply bowed to the bidding - to the cracking of the whip - of the extraparliamentary body of 12 witless men, socalled by the Deputy Leader of the Opposition, who told the honorable member for Melbourne what to say and when to say it. The parliamentary business of this nation will be much better conducted when the Leader of the Opposition, whoever he may be, is in a position to speak without outside dictation by people whose outlook is inimical to the proper interests of this country. I do not charge- the Leader of the Opposition with anything in the nature of wrong motives, but I do say that in his servitude he has created a position that would lead many people to wonder whether his speech tonight on the Vietnam situation had been written by Mr. Chamberlain or by Ho Chi Minh himself. It is a great pity that the Opposition here does not have a Leader who is prepared to show a little independence. That the Federal Executive told the

Leader of the Opposition to make a speech charging the United States and the Australian Governments - the West - with lack of standards and lack of scruples is perfectly well demonstrated, because we know that the Deputy Leader of the Opposition in his recent agonies referred specifically in a statement to the fact that the Leader had been told to make an anti-American speech. We heard it tonight.

I say unequivocally that I wholeheartedly support the decision of the Government to increase our military commitment in South Vietnam. I applaud, and I think anybody with a sense of responsibility will applaud, the decision of the Government to make its proposed generous contribution to the capital of the Asian Development Bank. Now that we have seen a substantial improvement in the military situation in the tragically war torn country of South Vietnam, I hope that the Government, as well as increasing our specific military commitment, will turn its attention soon and urgently to stepping up the scale of our economic and technical assistance to South Vietnam. I think it is a truism that military means are not the solution to the problems of South Vietnam. What military means will do for our cause is to prevent a military solution being imposed upon us from outside by North Vietnam and China. Military means are an essential part of the job, but, now that we are witnessing what I regard, T am sure pot over optimistically, as a substantial improvement in the conditions of the country, I hope that the Government will see its way clear to stepping up the scale of our economic commitments to South Vietnam. I think it is important that this should be done. While we know that we see twin solutions to this country's problems - military assistance and economic and social assistance - we must make it appear beyond any doubt to our Asian friends that it is the fact that we see the position in this way.

Let me remind the House that we are spending about .6 per cent, of our gross national product annually on economic and technical assistance to Asian countries. But while the scale of our economic and technical aid to South Vietnam and to other Asian countries is commendably high. I believe that it could well be higher. This is not something that can be accomplished overnight. I do not think it is reasonable to suppose that, with the difficulties that are to be found in some parts of our economy today, we can say that we will overnight increase our economic and technical aid so that it becomes 1 per cent, of our gross national product. This would be an unreasonable approach. These things cannot be done quickly. But I do believe that now we are increasing our military commitment to South Vietnam we should hand in hand with this action plan to phase up gradually our civil aid. This is, I believe, of incalculable importance to the solution of the problems of South Vietnam which we wish to see free of its present oppression and in which we wish to see created conditions of peace with economic and social justice, ft is of vital importance, I believe, that we do these things because we must make it appear to Asian nations as is the fa;t that we see that the solution of the problem has these multiform aspects.

Mfr. CURTIN (Kingsford-Smith) [10.26]. - Economic growth in the Commonwealth must depend on good management and wise administration. Australia is vitally concerned to ensure that financial and technical resources are .used effectively for economic development. Our direct responsibility, of course, is to ensure that this economic growth occurs within our own borders and in Papua and New Guinea. However, the crucial impact of economic development and the effectiveness with which resources are allocated are apparent in all countries. The Australian Labour Party takes the view that, in the interests of the Australian economy and the Australian people generally, greater emphasis must be placed on the public sector, especially when we realise that the necessary finance can be channelled through a firmly established Commonwealth government banking institution. When we analyse the resources of our national wealth we are forced to take into consideration our enormous mineral potential which forms the basis of our great steel industry which the Labour Party believes must be nationalised in the best interests of the nation generally. The nationalisation of our steel industry will conserve our national wealth and we will process our steel in the same v/ay and sell the finished article to anyone interested.

We believe that an Australian shipbuilding industry must be established and that an immediate start should be made on the construction of a Commonwealth overseas shipping line to carry our exports to all parts of the globe. This makes the basis of firm economic growth. As an Australian, it is hard for me to believe that the Australian continent, completely surrounded by water as it is, and which boasts great rivers and wonderful harbours, does not possess an overseas shipping line. It is one of the very few countries in the world in this unhappy position. Why has this great nation to stagger along paying an annual shipping freight bill of between £400 million and £450 million? This money has to be paid in sterling. The situation is preposterous to say the least. Under present conditions, Australia is totally at the mercy of an avaricious overseas shipping monopoly which has a powerful grip on our economy. This grip must be broken.

Again, thinking in terms of defence, I believe it is most essential that a shipbuilding industry be set up. This would enable Australia to construct its own naval vessels necessary for the defence of this great continent. We were able to obtain the necessary experience in building ships in World War II when we were unable to depend on the mother country as it had its hands full at that critical period. However, the Australian technicians rose to the occasion. Australia is no longer a primary producing country. Its secondary industries are growing apace. Australia is facing a great period of economic development. Few nations are in need of nationally controlled maritime transport as Australia is because, first, we are an island continent. Secondly, as a major agricultural, pastoral, processed food, mineral and metal producer with a relatively small population, we must export a much higher percentage of basic output than the vast majority of other countries. Thirdly, our major primary industries rely on overseas markets. Fourthly, our major secondary industries rely on overseas sources of raw materials and on heavy capital equipment. Fifthly, our secondary industries are much further from their main sources of raw materials and capital equipment than are those of other countries which compete with us for manufactured markets. Sixthly, shipping is a most vital activity with wide implications for the Australian economy. Without certain imported raw materials, basic Australian industries would grind to a halt. Without a continuing volume of exports the national economy would bc in chaos.

In 1962-63 our overseas trade accounted for £2,300 million, or more than 26 per cent, of our national turnover of goods and services. Although small in population Australia is among the 10 great trading nations, yet it has no merchant marine to carry its overseas trade. In the year 1961- 62 only .6 per cent., or one ton in every 155 tons of goods entering Australia, and only 1.5 per cent, of goods shipped from Australia, were carried in vessels registered in Australia. With no overseas merchant marine we are unique among the world trading nations. This deficiency puts the Australian economy largely at the mercy of the overseas shipowners, and makes us the laughing stock of the world.

Freights raid by the Australian buyer on imports approximated £160 million last year. Freights paid to overseas shipowners on our imports are the greatest single charge in the " invisibles " account in our balance of payments - well ahead of the aggregate outgoing of dividends, interest, royalties and travel and migrant remittances. Freights on our exports are paid by the overseas buyer but represent a very real, if indirect, charge on the Australian economy. Because our major exports are sold in competitive markets, the freights charged represent a deduction from the export returns of Australian producers. On the best statistics available it has been reliably estimated that the total freight charged by overseas shipowners in 1962- 63 to carry our exports and imports was £430 million. Of this amount approximately £80 million was spent in Australia. The net cost to the Australian community of the freight rates charged by overseas shipowners was therefore approximately £350 million. With a nationally owned overseas shipping line a substantial part of this £350 million annual net cost would remain within the Australian economy and be available for further development.

A Government committee of inquiry in 1955 calculated that 32.5 per cent, of total voyage earnings in the Australia-United

Kingdom trade went to profit. Assuming the same profit rate on all our overseas trade, it means that approximately £140 million annually is extracted from our trade by overseas shipowners as clear profit. With a nationally-owned overseas shipping line a substantial part of this £140 million would be available to the Australian nation - originally for ship acquisition and later for freight reduction.

When the overseas shipowners finally persuaded the Bruce-Page anti-Labour Government to sell the thriving Australian Commonwealth Line of Steamers to them in the late 1920's, they did their best to ensure that their stranglehold on our overseas trade would not again be successfully challenged by Australian enterprise. They secured from the Commonwealth Government an amendment of the Australian Industries Preservation Act to give them an exemption from its anti-monopoly provisions. This is set out in section 7C. This remarkable provision s'ill exists and gives the overseas snipping COnbines, bound tightly together in their conference type organisations, virtually a legal monopoly of the carriage of our overseas trade. This astonishing privileged position has not only freed them from serious competition in this field but has also enabled them to take over a large slice of our interstate cargo, sea trade and virtually all of our inter-sea passenger trade. It is estimated that not less than 80 per cent, of the entire shipping and stevedoring activity on the Australian coast is directly or indirectly owned or controlled by the overseas shipping monopoly.

It was during the period of the William Morris Hughes Labour Government in 1915, when notable sales of Australian primary products were made abroad, that the question of transport arose and the overseas shipping conference first showed its teeth in its anxiety to hold Australia to ransom, despite the fact that World War I was raging. However, the Hughes Labour Government stood its ground and accepted the challenge. What a pity this Government has not accepted the challenge. The Hughes Government purchased a fleet of vessels to convey our products to their overseas destination. This fleet of steamers came to be known as the Australian Commonwealth Line. It did meritorious service for the Australian nation until it was sabotaged by the then paid stooges of the overseas shipping conference and became the victim of a scandalous transaction by the Liberal Government under the leadership of Stanley Melbourne Bruce when a phoney sale of the line was made. Now, 50 years later, it is still doubtful whether the arranged price was ever paid to the Australian Treasury by the overseas shipping conference. However, that is another story.

Now we come to another interesting point. The present Minister for Trade and Industry (Mr. McEwen) is also the Leader of the Country Party in this House. That Party supposedly represents the great body of country people, most of whom are primary producers. In view of the fact that so many of the Party's supporters are innocent victims of the vast exploitation being carried out by the overseas shipping conference, can the Minister tell me whether they are in favour of the creation of the Commonwealth overseas shipping line?

Mr Turnbull - Why not raise that matter at question time?

Mr. CURTIN__A Commonwealth overseas shipping line would relieve the general body of producers, which the honorable member for Mallee and his Party represent, or claim to represent, of the crushing burden of exorbitant freight charges. Now is the time for the Minister to make up his mind and declare himself and his Party. Can he tell me also the source of the sinister influence which allows this irresponsible body called the overseas shipping conference to decide what, where and when ships will be available, and at what price, to carry our exports and our imports to and from all quarters of the globe? Is it not time Australia woke up to the present systematic robbery of its people by a bunch of overseas financial crooks? Naturally, the people of Australia must become suspicious of a government which allows such a state of affairs to continue year after year. We must not forget that this Government has been in power since 1949, and this vicious racket is still operating.

Shipowners have a notoriously predatory reputation. Their complete lack of patriotism is shown by their frequent resort to flags of convenience in callous disregard of any national interest. Their total con tempt for the interests of another nation - Australia in this case - is not surprising. They refused point blank to make their books or accounts available to the Australian Government Committee of Inquiry in 1955. Their actual profits remain a close secret. Sufficient is known, however, to enable that Committee so say of the Australian-United Kingdom-Continent trade -

Shipowners engaged in this trade, viewed as a group, have had in effect, a monopoly of the trade, and the conditions are conducive to basing the freight rates on what a traffic will bear.

It is evident that there has not been a strong organisation of shippers to negotiate with the shipowners and they have not had available any facts as to the profits made in this trade but only general facts relating to movements in costs.

On the limited material available, the Committee was able to estimate the profits of that trade, measured as a percentage of the original cost of a vessel, as 36 per cent, in 1950-51, 38 per cent, in 1952-53, and 31 per cent, in 1954-55. The Committee found, for example, that while the South African Government was able to bind the shipowners to a rate of profit of 5 per cent, of the replacement value of their vessels, the same shipowners' monopoly position in Australia enabled them to charge us freight rates which gave them a profit rate over four times higher - 21.9 per cent, of replacement value of vessels.

As further indications of how the overseas shipowners hold the Australian economy and its workers and producers to ransom, I point out that although the productivity of waterside workers in Australia rose - I emphasise " rose " - by 73 per cent, between 1955 and 1962, thus reducing labour costs per ton handled, despite wage increases of 25 per cent., the freight rates on Australian products increased by amounts varying from 35 per cent, for hides, skins and wool to 65 per cent, for cheese and 70 per cent, for beef. The freight rates from South Africa to Singapore, a distance of 5,960 miles, are generally from 20 per cent, to 50 per cent, lower than those from Sydney to Singapore, a distance of 4,632 miles. Why is this so? The conference lines carry steel from England to Indonesia and Malaysia cheaper than they do from Newcastle to those places. Again, Scottish and Danish potatoes can be landed in Ceylon and Singapore cheaper than can Australian potatoes because of this freight discrimination. What a racket it is. Further, a promising demand for Australian apples in Indonesia in 1963 could not be met because the conference lines chose not to make ships available. Again, as soon as a thriving meat trade to America was built up in 1963, the overseas shipowners raised freights to the United States by from 10 per cent, to 124- per cent.

British shipowners usually give preference to British trade against that of rivals, but when General Motors-Holden's Pty. Ltd. burst into the New Zealand market, which was previously a preserve of British automobile firms, the "Daily Telegraph" described how British shipowners moved to protect the British automobile market. On 1st July 1956, the British shipping ring increased its freights for the transport of cars from Adelaide to New Zealand by 16.6 per cent. Still General Motors-Holden's Pty. Ltd., with the Australian made car, looks like making a hole in the British car market in New Zealand.

On 6th August there came a notification that freight rates across the Tasman were going to be still higher - another 28.57 per cent, from Adelaide and 42.8 per cent, from Melbourne. General Motors-Holden's Pty. Ltd. then sent a trial shipment of Holden cars to Singapore. In December 1956, the " Daily Telegraph " described the reaction of the British shipowners. It stated -

On November 1st the freight rates on cars to Singapore went up 32.5 per cent, from Fremantle and 24.8 per cent, from Brisbane, Sydney, Melbourne and Adelaide . . . Where Australia had been a potentially dangerous competitor in the Singapore and Malayan oar market, its competitive capacity was now reduced.

The British led shipping conference sometimes uses its freights in a manner that makes a mockery of the Commonwealth fiscal powers and of export drives. No export drive can in fact be certain of substantial success until there is a national shipping line. The Sydney " Daily Telegraph " reported from Canberra on 14th December 1956 that an official examination of shipping freights showed that outward freights had increased more with countries in which Australia has potential markets for its manufactured products, including cars, than the inward freight rates from the same countries. The Canberra correspondent of the " Daily Telegraph " stated-

The increases in outward freights from New Zealand, Ceylon, India and Hong Kong, all possible markets for Australian products, have been greater than the inward rates.

I would like to point out that an organisation called the Ludwig company will use Australia in the future. This is the same firm of Ludwig whose representative met the Australian marine unions early this year and failed to convince them to agree to the use of dump barges for this contract. The Australian National Line wanted to submit a tender for the contract but the Government informed the line that the Constitution barred the A.N.L. from trading interstate. Look at the link up. We have bauxite deposits controlled by overseas monopolies and refineries owned by overseas monopolies. Our Prime Minister said recently -

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