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Tuesday, 19 April 1966

Mr FAIRBAIRN (Farrer) (Minister for National Development) . - The honorable member for Scullin (Mr. Peters) began his speech by saying: " Everything in the garden is lovely. Or is it? " 1 do not know whether the speech that followed was the honorable member's speech or a speech by Staniforth Ricketson. At least in part it was Staniforth Ricketson's speech. The honorable member for Scullin said that there was need for an economic stimulus. Where has he been for the last few weeks? Was he here when the Treasurer (Mr. McMahon) made his speech in which he detailed four specific areas in which there were soft spots, as he called them? Those areas were housing, motor vehicles, employment and drought relief. He detailed the steps that the Government has taken in order to see that more finance is available and that assistance is given in those areas.

The honorable member ought to know that this stimulus was given by an alteration in the statutory reserve deposit ratio, which will free $125 million; that a new trading bank Farm Development Loan Fund, which will make available another $50 million, was set up; that housing was granted $15 million; and that we have underwritten the drought expenditure of Queensland and New South Wales to the extent of perhaps another $20 million this year. Already there are signs that this action is having the desired effect. One sees a stiffening in all of these areas and particularly in employment. The number of people seeking work is dropping quite steadily. I am convinced that, although there always will be some soft spots in any economy, this action is having the desired effect. The honorable member for Scullin then went on to say - again I think this wat part of Staniforth Ricketson's address - that there is an urgency behind the need to develop our nation as quickly as possible.

I agree with that entirely. But I believe that, unfortunately, the way in which the honorable member would tackle this problem would have the very opposite effect.

I have sat here in this House for very nearly 17 years and listened to the honorable member ranting and railing against this dreadful thing that he calls foreign capital. I still do not know whether he regards capital from Great Britain as foreign capital. I thought that Australia was part of the British Commonwealth of Nations. Our country has been developed in the past by British capital. The United States of America was developed by British capital until the Second World War, when the British had to sell their capital in that country in order to pay for the war. Only in the last two years has the United States, for the first time, provided Australia with a little more capital than Great Britain has provided. However, we have not done too badly. Do honorable members know that 90 per cent, of our development has bean financed by Australian capital? That is not too bad when we remember that we invest 25 per cent, of our gross national product in development. I believe that only one country invests a greater percentage of its gross national product in development, and that is Japan.

We have done pretty well. But Australia is a small nation. We have to bring in capital and knowhow. There are many aspects of industrialisation in which we in Australia are not fully equipped. I take as an example the search for oil. Ten years ago very few people in Australia had the technical knowledge to carry out seismic work. No one had had experience in drilling from a platform at sea. Our development in fields such as this has been carried out by a combination of overseas capital and Australian capital and overseas knowhow and Australian skills. Then there is the size of the investment. Does the honorable member for Scullin realise the amount of money that is needed? I speak only of some of the new mineral finds. The amount of capital required in the next two years to capitalise these discoveries is more than $500 million. That is only for minerals, let alone industry and many other aspects.

So we can do one of two things: We can go ahead at a very slow speed and do the job ourselves. Of course, that would mean that we would have less employment and we would have to reduce our immigration programme because there would not be work for the men when they came here. On the other hand we can have the importation of capital and develop this country in the fantastic way in which it is being developed at the present time. In the field of mineral development we have not done too badly. Even among the iron ore companies there is every type from, on the one hand, companies with 100 per cent. Australian ownership to, on the other hand, companies with 100 per cent, overseas ownership at the present moment. However, the State acts under which these companies operate say that they must make a portion of their equity available to Australians when they get into production.

If anyone is to be blamed for the fact that Australia has not taken a greater share in development, particularly in mining but also in some other fields that overseas people are entering, surely it is we ourselves. What are we doing to provide more money? I have said that we have not done badly; but if we are to go ahead at the same speed, as the honorable member for Scullin wants us to do, we have to do better. How many honorable members hold shares in oil search companies? I believe that it is the duty of every Australian to take up some shares - it may be only a few - in oil search companies. But every time I say that, someone says: " I bought some shares, but I lost money on them ". Yet people go out to the races and lose money and never complain about it. Only last week I saw that the turnover of the Totalisator Agency Board in Victoria exceeded S2 million in one week for the first time. The Board was proud of that. Goodness knows why. Australians gamble on horses, dogs, poker machines and lotteries for the Sydney Opera House, all of which contribute nothing, or practically nothing, to the development of the country.

Mr James - You must have culture.

Mr FAIRBAIRN - I know that some honorable members need their culture improved but I do not think that such gambling is the way to go about it. People who complain about not enough money going into development should look at the tragic sight of good oil search shares being offered for sale at 3d. each and not even attracting a bid. Yet people have the gall to come into this chamber and say. " Look at this dreadful thing called foreign capital ". Overseas investors are taking the opportunities that we ought to take.

I have said that we are not doing too badly. As for our being exploited by people from overseas, I was interested enough to take out certain figures. Last year the income payable on investment from overseas represented about 5 per cent, on that investment. But, in fact, a considerable amount of this was retained in Australia. The amount that went overseas was far less than that figure. It is interesting to note that the percentage of Australian industry owned overseas is actually dropping. The latest figures available to the Treasury show that the percentage is slightly smaller today than it was a year or two ago. Surely we have achieved much as a result of this overseas investment. We are going through one of the most interesting and exciting periods in the whole history of Australia. I believe that it is far more exciting than even the gold rush days. Let me just mention some of the mineral discoveries to show the fantastic way in which Australia has increased its mineral development and its knowledge of the resources it possesses.

In 1953 known bauxite reserves in Australia were 10,000 tons. That would not fill one modern ship. Today we know that we have at least 1,500 million tons of high grade bauxite. I have heard it said that we probably have something like one-third of the world's known deposits. Our mineral deposits have been discovered partly through overseas investment; partly by Australians working in co-operation with overseas investors; and partly as a result of work done by the Bureau of Mineral Resources. I have mentioned a figure of 1.500 million tons of high grade bauxite. But we all know that recently a company has discovered another very large deposit of bauxite in the northwest of Western Australia. The company has not yet had time to evaluate that deposit fully. However, it appears to be of higher grade than either the Weipa or Gove deposits and is of the order of those two deposits - perhaps larger than one and smaller than the other. I am sure that we shall see further discoveries not only of bauxite but also of many other minerals.

Let us look at the iron ore scene. In 1960, the known deposits in Australia were 259 million tons. This was considered to be just enough for Australia's own use during our lifetimes and as a result an embargo on the export of iron ore from Australia had been imposed in 1938. This was eased after work by the Bureau of Mineral Resources at Constance Range and Savage River had shown that larger reserves were available and that we could safely partially lift the export ban and still have sufficient iron ore for our own industry. As we all know, fantastic discoveries have been made since. At one stage, it was said that there were reserves of 15,000 million tons of iron ore, but now the geologists have given up even trying to assess the available reserves. We have already sold for delivery to the Japanese 330 million tons of iron ore to a total value of £1,500 million.

Mr Pollard - Was it sold by English or American companies?

Mr FAIRBAIRN - It has been sold by all sorts of companies.

Mr Pollard - Why was it not sold by Australian companies?

Mr FAIRBAIRN - Evidently, the honorable member has not been listening. I stated that the volume of capital needed for the development of projects on this scale was so great that it was impossible for it to be provided wholly by Australian companies. As a matter of fact, some of the companies are wholly Australian. Some, such as Mr Newman Iron Ore Co. Ltd., have 50 per cent, of Australian equity and others have large proportions of Australian equity. Not one of the companies operating in Western Australia will not at some time have Australian equity, because the law under which they were given leases requires them to throw open the gates to Australian investment if Australian capital is available.

Mr Pollard - Why do they not-

Mr FAIRBAIRN - I ask the honorable member to keep quiet for a moment.

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