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Thursday, 20 May 1965

Senator CORMACK (Victoria) .- I want to take up a phrase which was used by Senator Bishop a few minutes ago. He said that the Labour Opposition in this chamber and in another place tended to take the wider view. He directed his remarks on the Bills before the Senate to what he conceived to be the wider view, that is to say, the narrow Australian problem relating to the balance of payments. There is a wider view on this which I will make clear in a moment. The point that must be repeated, as I stated earlier and as the Leader of the Government (Senator Paltridge) mentioned earlier and from time to time in answer to questions, is that the balance of payments problem is a worldwide problem. This problem has been coming over the horizon for some time, and in my speech to the Senate on the ministerial statement on our balance of payments position I attempted to illustrate that the rate of capital inflow is not the cause of our balance of payments problem. Rather, the balance of payments problem is a worldwide phenomenon. At its Tokyo conference in February 1965, the International Monetary Fund recommended increased contributions by member nations.

It should be recognised by every honorable senator that there are two causes for our balance of payments problem. One is the inability of the United States of America, which holds the reserve currency of dollars, to sustain the rate of conversion which has been forced on it by Western European countries, particularly France and Germany, which have been seeking to exchange dollars for gold. It seems that the impetus substantially comes from General de Gaulle who appears to resent the fact that dollars and sterling are a reserve currency. That, in part, has caused the immediate hiatus, as I and others have explained before, in the balance of payments problem.

The basic problem in relation to balance of payments is a lack of money suitable to underwrite the increased growth in world trade. That is the reason why the International Monetary Fund has recommended to its subscribing members the increases which appear in the annex to the report presented to the Senate. In addition there has been laid on each senator's desk and introduced into the Senate by the Minister for Civil Aviation (Senator Henty), who is in charge of this Bill, the terms of Australia's acceptance of a reservation to the protocol for amending the General Agreement on Tariffs and Trade.

The object of the exercise is to try to free some of the choked channels so that in physical terms trade can move freely. It is complementary to the attempt by the International Monetary Fund to increase its reserves of currencies, both in gold and dollars, which depositors will make in order to assist the free movement of international trade. The annex to the report illustrates the wider problem that has not been acknowledged, it seems to me, by any member of the Opposition either here or in another place. The annex to the report and the papers presented to the Senate relating to the amendment to G.A.T.T. show that the concessions on tariff matters which we have made parallel almost exactly the unfortunate countries that are involved with the problems of trying to develop their own economies so that the attack on the economic development of the under developed countries of the world shall be twofold. First, we must try to free the channels of trade so that they can earn currencies in order to carry out their own development. Secondly, the more developed countries must provide assistance wherever possible, to the under developed countries. The annex to the report shows the contributions that are to be made in United States dollars. Africa is a rather text book case in the wider problem not acknowledged by the Australian Labour Party. I shall cite the Central African nations. Burundi is to contribute 15 million dollars; the Cameroons. 19 million dollars; Chad, 10 million dollars: Congo, 10 million dollars; Ghana, 69 million dollars; Ivory Coast, 19 million dollars.

Senator Wright - What amount is Australia to contribute?

Senator CORMACK - Five hundred million United States dollars. France, another illustration of a developed country, is asked to subscribe 985 million dollars. The United States of America, to underwrite the International Monetary Fund, is required to subscribe 5,160 million dollars. The United Kingdom is asked to make the substantial contribution of 2.440 million dollars. New Zealand, which is a small European-derived nation as it were, has to subscribe 157 million dollars. The population of New Zealand is about 2i million. The Democratic Republic of Congo, with a population of perhaps 20 million, is asked to contribute 57 million dollars. That illustrates the disparity existing in relation to development and under development in the world today as assessed by the International

Monetary Fund. It also illustrates the problems facing the world. Money must be obtained for development and I suggest that it is useless for the Opposition, either here or in another place, to decry Australia's attempt to import capital for the further development of this country. Surely the measure of the correctness of the importation of capital into Australia is the International Monetary Fund's assessment of Australia's capacity to subscribe to that Fund.

My only other comment in relation to that matter is one I shall harness to the subject matter of the debate. It is well known that the Prime Minister (Sir Robert Menzies) is to attend the Commonwealth Prime Ministers' Conference in London soon. It is obvious to anyone who has been fortunate enough to attend a conference ort behalf of the Australian Parliament - as I was 18 months ago at Kuala Lumpur - that the pressure is coming on the developed countries of the Western world, but in particular it will come on the Prime Ministers' Conference in London to try and set up parallel monetary systems, managed and directed by a secretariat. The belief was expressed quite frankly in Kuala Lumpur by. many representatives of African countries that when such monetary systems are established, they will be able to make a levy on the developed Commonwealth countries for the capital they believe is necessary for their own development. I do not know that we can sustain our own capital development and that of Papua and New Guinea, our defence requirements and at the same time find additional capital to sustain the developmental needs of the African countries. I believe that if this demand is made at the Commonwealth Prime Ministers' Conference in London, we should not be committed too deeply to find additional capital for the development of those areas. In my view we have enough on our plate at present. I shall not detain the Senate any longer. I commend the Bill.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

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